Fund sales at near record levels on equity rise

Fund sales reached the second highest level on record last year as private investors continued to regain confidence in equities.

The stock market resurgence in the second half of 2010 saw net equity fund sales - the amount invested minus redemptions and withdrawals - hit a ten-year high of 7.5 billion, replacing bonds as the most popular asset class.

The global bonds, global growth and global emerging markets sectors reported record net sales as investors shifted away from the UK and Europe, the Investment Management Association (IMA) revealed yesterday.

Total net retail sales reached 23.9bn in 2010, just short of the 25.9bn record set the previous year. The figure was boosted by the 2.5bn that investors added to their holdings in December alone, the biggest monthly figure of the year.

Sales of individual savings accounts (Isas) hit their highest level since 2001 as investors took advantage of an April 2010 increase in the annual allowance.

Richard Saunders, chief executive of the IMA, said private investors spread their nets wider than ever last year.

"Faith in equities strengthened, with 2010 showing the highest equity net retail sales since 2000," he said. "While investors showed a strong bias towards UK and European equities a decade ago, investors have now diversified their equity exposure, with 20 per cent of gross sales going into global funds in 2010."