'Each-way' bet fund helps SLI lift retail sales

SALES of retails funds have soared at Standard Life Investments (SLI), as investors flocked to its absolute return fund, designed to make money amid all market conditions.

Investors ploughed a total of 1.46 billion into its mutual fund range in the six months to end-June, up 96 per cent on the same period a year ago. On a net basis - after outflows - sales surged 128 per cent to 713 million, as fewer investors fled volatile markets than last year.

Overall, investors placed a gross 11.3m with the Edinburgh-based fund manager every day of the first half of 2010.

The top-selling fund was its Global Absolute Return Strategies (Gars) fund, which accounted for 42 per cent of gross sales. Absolute return funds can short-sell - a bet that makes money when prices fall - so can aim to make money in both rising and falling markets. Investors have flocked to such funds amid stock market volatility: in the past year, the FTSE 100 has swung as much as 21.4 per cent - from a low of 4,797 to a high of 5,825.

Inflows into SLI's Gars fund boosted its market share of gross sales in the absolute return sector from 8.5 per cent in 2009 to 25.5 per cent in 2010. The fund has returned 8.7 per cent per year over the past three years with a volatility level of 7.3 per cent. Other best sellers were its Global Index Linked Bond and UK Smaller Companies funds.