Investors put a massive £1.1 billion into funds in January, according to the Investment Management Association.
The latest data from the IMA shows that net retail sales topped £1 billion for the tenth consecutive month, with equities
the most popular asset class yet again.
Total funds under management - including institutional investments – swelled to £757 billion, up from £691 billion just a year before in January 2013.
The UK was the best-selling region by far, with net sales in January of £644 million, up significantly from the average over the past 12 months of £243 million.
The next most popular region was Europe, with net sales of £261 million.
Asia saw the biggest outflows with £235 million pulled from the region by retail investors.
In terms of sectors, Targeted Absolute Return funds
saw a spike in popularity with fund sales doubling on their average. Sales for the month were £343 million, up from a typical £184 million, as the sector returned to popularity for the first time since May 2013.
UK Smaller Companies, which has not been in the top five selling sectors since January 2001, was the second most popular for the month, netting retail sales of £241 million, the highest sales figure since records began in 1992.
Meanwhile, investors turned away from Sterling Corporate Bonds, which saw a net outflow of £225 million.
Jason Hollands, managing director at Bestinvest, says the figures show that confidence among investors is growing.
Hollands points out that the current situation in Ukraine may have a negative effect on this sentiment but investors with a long-term strategy should not be panicked.
"It is important to hold your nerve when markets experience a bout of hysteria and to do what makes sense over the long-term. A sensible strategy is to ensure your portfolio is well diversified and matches the appropriate risk profile to meet your overall goals," he says.
"Only the coming weeks will show whether this [situation in Ukraine] dampens enthusiasm in the key end of tax year period when many investors typically fund their Isas and pensions."
An interchangeable term for shares (UK) or stocks (US). Holders of equity shares in a company are entitled to the earnings and assets of a company after all the prior charges and demands on the company’s capital (chiefly its debts and liabilities) have been settled. To have equity in any asset is to own a piece of it, so holders of shares in a company effectively own a piece proportionate to the number of shares they hold. (See also Shares).
Absolute return funds
Absolute return funds aim to deliver a positive (or ‘absolute’) return every year regardless of what happens in the stockmarket. Unlike traditional funds, they can take bets on shares falling, as well as rising. This is not to say they can’t fall in value; they do. However, over the years, they should have less volatile performance than traditional funds.