The IMA fixed income sector witnessed its largest ever monthly redemption in June as investors globally adjusted to a sudden jump in yields, with £624 million being yanked from bond portfolios.
The total outflow echoed figures previously published by the US Investment Company Institute which showed that $28 billion was withdrawn from member-company bond funds last month.
Despite the flood of money out of fixed income funds, net sales remained positive with £1.1 billion in retail sales – primarily into equity, which gained £884 million over the month.
Jonathan Lipkin, IMA director of public policy, said: ‘The highest ever net redemptions of fixed income funds by retail investors may have been a response to anxieties about future tapering by the Fed and other central banks.
‘Net flows in June were instead driven by equity funds. In contrast to recent trends, investors showed a preference for UK equity funds in June, which saw the highest net retail sales since October 2006.’
Total assets under management at IMA member-companies stood at £714 billion, with net retail sales of £5.3 billion over the second quarter the highest figure since Q2 2011.