M&G tops January best-sellers list

M&G Global Dividend and M&G Optimal Income were the best-selling investment funds in January, according to the latest research from the Cofunds platform.

The data shows M&G Optimal Income has attracted an astounding £2.3bn in assets under management over the last 12 months while M&G Global Dividend had inflows of £977m.

Top-selling funds in January

January 2012 net sales

M&G Global Dividend

M&G Optimal Income

Premier Multi-Asset Distribution

Jupiter Merlin Income Portfolio

Newton Global Higher Income

Cazenove MM Diversity

M&G Strategic Corporate Bond

SL Inv Global Absolute Ret Strategy

HSBC Open Global Distribution

CF Miton Special Situations

Source: Cofunds

With returns of 80.29 per cent over the last three years, the M&G Global Dividend fund is one of the best-performing vehicles in the Global sector. By comparison the average fund has returned 46.22 per cent.

FE Alpha Manager Stuart Rhodes has no specific yield target but looks for companies that have the potential to grow their dividend consistently over the long-term.

"The global dividend theme is certainly one that is gathering momentum," said Patrick Connolly, head of communications at AWD Chase de Vere.

"There is a perception that investing in companies that pay dividends is a safer bet than those that don’t and that suits investors who are dipping a cautious toe back into equity markets, having had a risk-averse end to 2011."

Cofunds revealed that 13 per cent of net sales were accounted for by funds in the IMA’s new Global Equity Income sector. This is further evidence that the strategy is gaining popularity with UK investors.

Connolly added: "The M&G Global Dividend fund also offers diversification away from the UK market, which is something we recommend investors continue to think about as they add risk to their portfolios."

FE Alpha Manager Richard Woolnough’s M&G Optimal Income tops the Sterling Strategic Bond sector over five years and Connolly says the fund is a good bet for investors who want a one-stop shop for their fixed interest exposure.

"The majority of investors don’t generally know where to go for their bond exposure but M&G have a very good record in that area and investors trust Woolnough to make the difficult decisions," Connolly added.

Cofunds data shows that four of the top-10 best-selling funds in January sit in IMA Mixed Investment 20%-60% Shares – the old Cautious Managed sector.

"Cautious Managed’s staggering intake in January was the highest it has seen," said Michelle Woodburn, manager of fund group relations at Cofunds.

"However, this figure has been skewed due to significant outflows in the UK All Companies, European, Specialist and Money Market sectors, which reduced the overall fund sales figures."

A recent article from FE Trustnet revealed that four of the funds in Chelsea Financial Services' new DropZone came from the 20%-60% Shares sector.

Woodburn added: "Elsewhere, North America attracted its highest ever market share, accounting for 11 per cent of sales, in comparison with an average of 4 per cent last year. Global Emerging Markets also increased their stake in the market share, taking nearly 7 per cent of net sales – more than double their monthly average in 2011."