Investors continued to pour money into equity funds at a rapid pace in May despite peaky looking valuations, with £588 million of net new money committed.
The Investment Management Association figures showed increasing demand for diversifiers however, with £491 million invested in property in the month, the highest since December 2009.
Despite the 2013/14 ISA year ending in April, inflows held up well, with total sales of £1.9 billion only just below the £2 billion average over the last 12 months.
‘Equities continued to lead the way with UK Equity Income and Global in the top five top-selling IMA sectors,’ said IMA chief executive Daniel Godfrey.
‘But property also received a big slice of investors’ funds and topped the IMA sector table for the first time since January 2010.’
The news of a continuing surge of money into property has prompted Bestinvest managing director Jason Hollands to urge investors to be cautious.
'Leading property asset managers had been forecasting total returns from UK commercial property in the region of 12-14% during 2014. However, the IPD UK All Property Index was already up 9% by the end of May (the latest data available),' he said.
'If the “experts” are correct, there could be more to come during 2014 but looking further out we urge investors to exercise a little moderation in their return expectations from this currently hot asset class.'
Total assets within the UK fund management industry continued to set new records, rising to £801 billion, despite a net institutional redemption of £311 million during the month.
For the first time in six months UK Equity sector funds were knocked off the top regional spot with net inflows of £112 million dwarfed by the £390 million which flowed into Global Equity funds.
Asian Equity funds filled out the top three with total inflows of £54 million. Fixed income saw much more limited appetite compared to equity with net retail sales of £223 million.