Another good month for new equity investments

The latest statistics from the Investment Management Association (IMA) show another good month for the sale of equity investment funds.

Equity funds remained the best sellers for investors in October 2013 for the seventh consecutive month.

This was despite the IMA UK Equity Income sector experiencing a net outflow of £298m during the month, prompted we believe by the resignation of Neil Woodford from Invesco Perpetual and subsequent movement of funds to other providers.

Funds under management in the UK reached £765bn in October, up 20% compared with the previous year.

The best selling investment sector in October was UK All Companies, with net retail sales of £307m. This is the first time since April 2004 that UK All Companies has been the most popular sector with investors.

It was also interesting to note that tracker funds experienced record investment levels in October, with net retail sales of £448m.

This means that £1 in every £3 invested in funds during October went into index trackers.

It means that tracker funds now have a 9.6% market share, up from 7.8% this time last year. Investing in index trackers remains a minority preference for UK investors, although there are signs this market will continue to grow in the future.

What these latest fund statistics show us is that investors have returned to risk assets, notably UK equities, as confidence picks up around a sustained economic recovery.

This might be a prelude to a Santa Claus Rally, often experienced in the week between Christmas and New Year, when investors buy company shares in anticipation of price rises in January, known as the January effect.

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