Sales of unit trusts have fallen by more than 50% as investors turn their backs on equity funds, The Telegraph reports.
According to the Investment Management Association, net retail fund sales slumped to 653 million compared with 1.5 billion in April. Although April’s figures would have accounted for the end of tax year rush, they still compare miserably with May 2007, when sales reached 1.1 billion.
Those who are investing are ploughing their cash into bonds and cautious funds. The IMA says that of the 653 million net retail sales, 366 million was invested in bond funds. The most popular Isas sector was the cautious managed sector, it adds.
Only around 160 out of 1,821 British-registered funds have delivered a positive return so far this year. Over the past 12 months, only about 300 funds are in the black. Many of the biggest and most popular funds have been hit by the global economic turmoil.
Top-selling funds such as Jupiter China and Gartmore China have fallen by more than 20% since January. Big-named funds from the likes of Schroders (Mid-250) and Jupiter (Income Trust) have shed around 20% or more over the past year. Even stalwarts such as Neil Woodford of Invesco Perpetual and Bill Mott at PSigma have not escaped unscathed – their funds have fallen by around 10% and 20% respectively.