UK retail fund sales hit post-Lehman low

Net sales of retail funds in the UK dropped to just £23m in August, according to figures published yesterday by the Investment Management Association, marking the lowest figure since October 2008, the month after Lehman Brothers collapsed and the world slid into full-blown financial crisis.

      The IMA said it was cautious of reading too much into one month's figures, but the statistics seems to indicate a general level of risk aversion among investors.

      Overall, investors put £518m into fixed-income funds, but equity funds suffered net outflows of £604m. Fixed-income funds have outsold equities for the past 12 months, the IMA said.

      The £23m in net sales of retail funds contrasts with £1.2 billion in net sales in August 2011

      The IMA's other indicators for August were even more negative. Net withdrawals by institutional investors totalled £868m and Individual Savings Accounts, or ISAs, suffered withdrawals of £106m.

     Richard Saunders, chief executive of the IMA, said: "Retail sales in August were the lowest since October 2008 but it’s only one month. Taking the first eight months of the year, net retail sales of £9.1 billion are down on last year but still healthy."

       In the first eight months of 2011, fund managers took in £15.8bn of net new money.

       A spokeswoman for the IMA echoed Saunders' warning not to infer too much from one month's figures, and said the true picture would begin to emerge in the next few months, if the poor sales performance continued.

    The IMA takes data from 98 asset-management companies on their month-by-month inflows and outflows from about 2,400 UK-domiciled funds. In total that accounts for £619bn, or about a seventh of the £4.2 trillion managed by UK asset managers for all their clients.