Flight to safety hits equity fund sales

Equity funds suffered their biggest outflows for three years last month, as nervous investors piled into fixed interest funds.

The Investment Management Association revealed yesterday that bond funds accounted for £1 in every £4 invested in October. Net fund sales of £615 million last month were similar to September’s level, but compared with a monthly average of £2.2 billion in the first half of this year.

Investors took £222m more out of equity funds than they put in, the biggest monthly outflow since October 2008 and the third time in four months that more money was taken out of equities than invested. Individual savings account net sales of £15m in October was £70m lower than a year ago.