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Funds under management of UK investment funds up two per cent in March

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Funds under management of UK domiciled investment funds were GBP347.9bn in March, an increase of two per cent from February and 20 per cent lower than March 2008, according to the Inves

Funds under management of UK domiciled investment funds were GBP347.9bn in March, an increase of two per cent from February and 20 per cent lower than March 2008, according to the Investment Management Association.

UK domiciled ISA funds under management of GBP67.9bn were two per cent lower than the previous month and 18 per cent lower than the previous year.

Net sales of UK domiciled investment fund Isas were GBP321.0m in March, an increase from the previous month’s outflow of GBP112.5m, and up on the GBP47.5m inflow seen in March 2008.

The most popular UK domiciled Isa sector in March was UK all companies, accounting for 21 per cent of gross Isa sales. In net terms the most popular ISA sector was protected/guaranteed funds. The most popular distribution channel for UK domiciled Isa funds in March was through fund supermarkets, representing 42 per cent of UK gross retail business.

The 2008/09 tax year saw net Isa outflows of GBP975m, compared to outflows of GBP1.7bn seen in the 2007/08 tax year. The 2008/09 Isa season (1 March – 5 April) saw net inflows of GBP529.1m, 74 per cent more than the previous tax year’s Isa season inflow of GBP303.8m.

The most popular Isa sector for UK domiciled funds in the 2008/09 tax year was UK all companies accounting for 21 per cent of gross inflows. The most popular distribution channel for UK domiciled funds in the 2008/2009 tax year was fund supermarkets, representing 39 per cent of gross Isa sales, followed by sales force/tied agents with 35  per cent of gross ISA sales.

Of the GBP1.7bn net retail sales in March, GBP1.0bn was invested in bond funds, followed by GBP445m in equity funds. Institutional holdings of unit trusts and Oeics saw outflows of GBP284m overall. Equity funds had an outflow of GBP314m while bond funds had an inflow of GBP250m.

The most popular sector in March was was GBP corporate bond, representing 21 per cent of gross retail sales of UK domiciled funds. Eighty eight per cent of gross retail sales into the GBP Corporate Bond sector were via intermediaries. The most popular distribution channel for UK domiciled funds in March was the intermediary channel, representing 85 per cent of gross retail business.

The GBP corporate bond sector was the most popular UK domiciled net retail sector with inflows of GBP935.1 million. The sector with the biggest outflows in March was the Europe excluding UK sector, with a net outflow of GBP88.3m.

Overseas funds under management of GBP15.3bn in March saw a four per cent increase from the previous month GBP235m increased by ten per cent from February 2009 and were down by 31 per cent on the previous year.

Net retail sales of overseas domiciled funds in March saw net retail inflows of GBP119.2m, compared to an outflow of GBP26.6m the previous month and a GBP79.8m outflow the  previous year. Net retail sales of overseas domiciled investment fund Isas saw an inflow of GBP1.3m in March, compared to an outflow of GBP0.3m the previous month and an inflow of GBP0.9m the previous year.

Richard Saunders, chief executive of the IMA, says: "This year’s Isa season saw significantly greater net investment than 2008. At the same time the strong inflows into bond funds of the last few months have been maintained. As a result, net retail sales for March were the highest they have been since April 2007."

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