After several months in the doldrums, fund sales perked up in October with a surge in bond fund investment.

Figures from the Investment Association, the fund manager trade body, showed a return to equity fund inflows following record outflows in Q3.

The latest data shows:

• UK savers invested £2.5bn into funds in October, with £1.3bn invested in bond funds
• Equity funds bounced back with inflows of £648m in October, after outflows of £1.7bn in September.
• Tracker funds saw net retail inflows of £1.8bn in October and provided two thirds of net retail sales.

Gross retail sales for UK fund platforms totalled £11.3bn, a market share of 51%. Retail sales through ‘Other UK Intermediaries’ including IFAs were £6bn, a market share of 25%. Direct gross retail sales in October were £1.5bn, a market share of 7%.

Best Selling IA sectors:  

The five best-selling Investment Association sectors for October 2019 were:

1. £ Strategic Bond was first with net retail sales of £423 million.
2. North America was second with net retail sales of £317 million.
3. Mixed Investment 40-85% Shares followed with net retail sales of £311 million.
4. Volatility Managed was fourth with net retail sales of £286 million.
5. Short Term Money Market was fifth with net retail sales of £237 million.

The worst-selling Investment Association sector in October 2019 was Targeted Absolute Return with an outflow of £566m.

IA data also showed that Fixed Income was the best-selling asset class and Equity was the second best-selling asset class.

North America was the best selling equity fund region followed by Global funds and Asia funds.

UK funds experienced net retail outflows of £7m while Japan funds experienced net retail outflows of £47m. Europe funds experienced net retail outflows of £312m.

Data on ‘Responsible Investment funds’, being published for the first time, showed net retail inflow of £467m. Their share of industry funds under management was 2%.

Chris Cummings, chief executive of the Investment Association, said: “Savers poured £2.5 billion into the UK fund market in healthy October sales figures. Half of this was invested into bond funds in stark contrast to the significant outflows of £1.7 billion in ‘red October’ 2018.

“Following a tough third quarter of record outflows, equities experienced a modest revival with savers investing £648m. As a year of political and economic uncertainty draws to a close, savers are considering all their options, with mixed asset, equities, and bonds seeing inflows in October.”