Record sales for tracker funds

Tracker funds have recorded their highest quarterly net retail sales on record, according to the latest data from the Investment Management Association (IMA).

The IMA, which has been publishing data on tracker funds since 1992, reports that the vehicles’ funds under management in the first quarter of 2011 were up 19 per cent, from £33.5bn to £39.8bn, compared with the previous year’s statistics.

"Q1 statistics show a growing appetite for tracker funds, with the highest net retail sales on record," said Richard Saunders, chief executive at the IMA.

"Although tracker funds account for a modest 7 per cent of total funds, this proportion has been growing steadily over the past two years."

Sales of funds of funds were also up compared with this time last year. Assets under management (AUM) increased 31 per cent from £46.4bn to £60.7bn.

Balanced funds represent the most widely sold type of fund of fund. More than half of total AUM for funds of funds were invested in the asset class.

"Funds of funds remain popular with investors. In gross retail sales terms, £1 in every £8 invested in funds was invested in funds of funds in Q1," added Saunders.

The story has not been so positive for ethical vehicles. Net retail sales were slightly lower than recent levels, at £90m. Total ethical funds under management were up 15 per cent on the first quarter of 2010, from £6.1bn to £7bn.

"Sales were somewhat below the average of £97m for the past four quarters," Saunders continued. "Ethical funds continue to represent just under 1 per cent of total sales."