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Woodford launch fuels record equity income fund sales

UK Equity Income fund sector records higher sales in June than previous five months combined thanks to Neil Woodford's fund launch.

 
Woodford launch fuels record equity income fund sales

UK equity income funds attracted a record inflow of £1.4 billion in June, buoyed by star manager Neil Woodford's high profile fund launch.

This represented the highest ever inflow recorded for the IMA UK Equity Income sector and more than inflows for the previous five months combined, making it the best selling sector in June.

'Investor interest in the Woodford Equity Income fund has caused a spike in UK Equity Income fund sales,' said Laith Khalaf, senior analyst at online stockbroker Hargreaves Lansdown.

'The "Woodford effect" is a clear example of investors backing a fund manager rather than a particular asset class, or market. Given the direction of markets is impossible to predict with any accuracy, this is a pretty sensible way to go about investing.'

The IMA Property sector was the next biggest selling in June, a distant second with net sales of £316 million. Funds in the Mixed Investment 20-60% Shares sector attracted £222 million, while strategic bond managers continued to appeal with an inflow of £171 million, against a backdrop of likely interest rate rises.

Funds in the UK All Companies sector experienced the highest outflows of £421 million, while UK Smaller Companies funds also suffered, with an £83.5 million outflow in June.

UK shares funds attracted the highest level of inflows since March 1998, with net sales of £870 million during the month. Global shares fund sales were £263 million over the month, slightly below the average of the previous 12 months.

Japan, Europe and Asia followed with inflows of £86 million, £74 million and £72 million respectively. Meanwhile, North American shares funds saw outflows of £140 million during the month, as investors took profits on concerns about market levels.

Total inflows were up by £1 billion to £2.1 billion, compared to June of last year.

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