Over the year, bond sales outstripped equities by £9.9 to £7.3bn, but it was a game of two halves. Bonds surged ahead in the first 6 months of 2009, but then dropped back as the equity rally that glimmered in March sparked into life over the second half. This represents a significant bounce-back for equities, which saw a net sell-off of £1.25bn in the annus horribilis of 2008.
Funds grouped in the IMA's 'Other' category were the third-biggest beneficiaries of this influx, logging net sales of £4.97bn; and the interesting statistic here is that absolute return vehicles accounted for over half of the total, with sales of £2.5bn. We do not have to go too far back to find sceptics pooh-poohing the idea of the absolute return approach while they jockeyed ahead on the back of the bull market. But the past 2 years of turmoil is just the sort of period that absolute return funds were designed to cope with, and their increased popularity is justified when we look at this performance chart.
Absolute Return vs. UK All Companies, 2yr
The IMA's sector league table puts Absolute Return as the top seller in December 2009, with net retail sales of £511m. This is just ahead of Property with £510.9m, which had been the top sector for the two previous months. Absolute Return was the second most popular IMA Sector for the whole of 2009, and was number one in both September and December. The £2.5bn in sales accounted for 10 per cent of new investments in funds in the year.
Sterling Corporate Bond was the most popular sector during 2009 as a whole, topping the sales chart from January to August, and posting total net retail sales of £6bn for the year. Nearly a quarter of money invested in funds during 2009 - 23 per cent - went into a fund in this sector.
The appetite for fixed interest paper extended to the Strategic Bond sector, which logged net sales of £1.96bn and rose to third place.
Property came fourth overall for the year and accounted for £1.6bn in net retail sales. It came first in both October and November 2009, and was only narrowly beaten to the top slot by Absolute Return in December. This is a dramatic reversal of the position in 2008, when Property was down at number 33, with a net outflow of funds of £466m.
Popularity is arguably the last reason for investors to opt into a particular sector, and when we take a closer look at how these favourites performed last year it seems to bear out that view. Our table sets out the IMA's top sellers.
| Sector name | TR % |
| IMA Absolute Return | 8.61 |
| IMA Property | 14.44 |
| IMA Sterling Corporate Bond | 14.31 |
| IMA Sterling Strategic Bond | 20.75 |
Few people surveying the paucity of gains to be had from a high street savings plan would have been disappointed with even the lowest of these numbers. But it is important to put them in context. The links will connect to full listings of the funds that comprise each sector, and reveal the range of very different outcomes that go to make up the mean.
Looking beyond, it may not have won any popularity contest but the Global Emerging Markets sector kicked up a storm last year, with a total return of 57 per cent in just 12 months. This is a sector that has been less affected by crunch conditions, and more nimble in engineering a return to growth. For those whose affinities lie closer to home, resilience and dynamism can also be detected in the UK Smaller Companies group, which chalked up a gain of 50 per cent overall.
As ever, the relationship between reward and risk must inform any foray into these regions of the investment world. Sticking with the favourites would expose investors for the most part to volatility in single digits, and the Absolute Return sector reins this back to around 4 per cent. It is a different story when the returns hit those spectacular 50 per cent levels, and investors can expect to encounter volatility that averages in excess of 20 per cent, with some individual funds offering rollercoaster lurches either side of the median return. These are investments for people with a long time horizon, and nerves of steel.