Global bond sales reached a record high in July as investor demand remains buoyant, according to the latest data

News - Savings

Written by Ray Clancy

Tuesday, 07 September 2010 11:07

Global bonds sales in July were the highest on record with funds under management topping £500 billion, a rise of 4% on the previous month, the latest figures show.

Net retail sales continue to be high at £2.2 billion in July, ISA sales at £267 million are up £38 million on the same month last year, the report from the Investment Management Association also shows.

‘Investor appetite for bonds was buoyant in July, with global bonds sales the highest on record. Although the first wave of investment in 2009 was heavily concentrated in UK bonds, we are now seeing a second wave of investment that is well diversified across UK and global fixed income,’ said Jane Lowe, markets director at the IMA.

‘In July, net retail sales increased to £2.2 billion, continuing the now established trend of high sales. Indeed, 13 out of the last 16 months recorded net retail sales above the £2 billion mark. Funds under management topped £500 billion, up 4% on last month,’ she added.

July saw net retail sales of £2.2 billion, up £0.1 billion on June. Net retail sales have remained steady over the past 12 months, apart from May’s dip to £962 million. Net retail sales have now been above £2 billion for 13 out of the last 16 months, according to the report.

Net ISA sales for July totalled £267 million, in line with average monthly sales of £288 million over the past year, excluding the ISA season of March and April. While funds under management in July were at £509.2 billion, up 4% since June. Funds under management returned towards April’s level, before market values fell back in May and June.

As in June, the leading asset class in July was Bonds with net retail sales of £928 million, up £349 million on the previous month. Net retail sales of bond funds were just below the record highs seen from December 2008 to May 2009, when bond sales surpassed the £1 billion mark every month.

Equities was the second highest selling asset class at £857 million, with July’s sales the highest since November 2009. Net retail sales for ‘other' dropped from £365 million in June to £58 million in July, well below recent levels. This drop was mainly due to outflows from the Unclassified sector, the report says.

The Global Bonds sector was the best selling IMA Sector in July, with net retail sales of £361 million, the highest selling month on record. Three out of the top five sectors were Bond sectors: Global Bonds, £ Corporate Bond and £ Strategic Bond. £ Corporate Bond was the second most popular IMA Sector in July, up from eighth position in June.

Global Growth was the third most popular IMA Sector and the highest selling equity sector in July, with net retail sales at £205 million.

The lowest selling sector in July was the Unclassified Sector, which saw a net outflow of £152 million, the sector’s largest recorded outflow since February 2008.

Gross retail sales through Fund Platforms totalled £2.9 billion, down £0.2 billion on the previous month, but maintaining Platforms’ market share of 37% of total gross sales. Gross retail sales for ‘other intermediaries’, which includes Wealth Managers and Stockbrokers, totalled £4 billion for July. Other intermediaries’ market share remained the same as last month at 52% of total sales.

Direct channels’ gross retail sales totalled £807 million in July, with only 10% of total sales, the channel's lowest market share since figures began in January 2010.

Fund Platforms saw funds under management increase to £92.6 billion in July 2010, their highest funds under management since figures began in January 2008 while personal pensions gross sales totalled £775 million in July, representing 30% of sales made through Platforms, down from 38% in June and compared with an average of 29% for the first half of the year.

Unwrapped products totalled £887 million in gross sales, representing 34% of sales made through Platforms, up from 31% in June and compared with an average of 34% for the first half of the year.