UK investors remain optimistic about the domestic market, according to the latest data from the Investment Association (IA).
Its findings, which focus on the numbers rather than any polled sentiment, reveal that £6.2 billion was invested nationwide in April, of which £1.5 billion was wrapped by ISAs. This is a £79 million increase of inflows into ISAs than over the previous 12 months.
Meanwhile, UK funds experienced £46 million of net retail inflows, and the UK Smaller Companies sector recorded the highest inflows since the record £279 million total in December 2019. Global was the highest selling investment sector with net retail sales of £1.7 billion, while UK Gilts was fifth with net retail sales of £256 million.
Equity fund sales were the strongest of any asset class at £2.9 billion and the IA’s Global sector remained the best-selling sector with net retail sales of £1.7 billion. Despite inflation concerns, sales to fixed income funds also remained strong - attracting £1.3 billion in net retail inflows, which is a £230 million increase on March. Tracker fund sales rebounded in April as net retail sales reached £2.9 billion compared with sales of £626 million in March.
Commenting on the results, Kate Marshall, acting head of Investment Analysis at HL, provided an encouraging macroeconomic picture and outlined the positivity invesors felt about the domestic economy.
She said: “UK investors remain optimistic about the prospects for their home market, according to the latest industry data. A successful vaccine rollout, the reopening of the economy, and the prospect of a rebound in consumer spending means many investors are feeling more hopeful about the future. This increase in risk appetite can also be seen in the popularity of UK Smaller Companies funds, which saw the highest inflow since the record in December 2019. Smaller businesses tend to be more domestically focused than their multinational mega-cap peers and have the chance to benefit as the economy gets back on its feet.”
There were, alongside the significant recordings of inflows, several sectors which suffered outflows. The worst-selling Investment Association sector in April 2021 was Corporate Bond with an outflow of £263 million, while p roperty funds experienced £38 million in net retail outflows.