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Investors flock to riskier investments

29 April 2009 / by Rachael Stiles
Figures from the Investment Management Association have revealed that investors are flocking to riskier investment options, pouring £1.7billion into trusts and funds in March.

This marks a 40 per cent increase on February's figures, and the highest level since April 2007, which the IMA supposes can largely be explained by the rush of investors topping up their ISAs before the end of the tax year in April.

The amount of money under management of UK investment funds amounted to £347.9billion in March – two per cent up on February's figures. UK domiciled ISA funds under management also increased by two per cent in March compared to the previous month, totalling £67.9billion.

Inflows into investment ISAs was £321.0million in March, up from the previous month's outflow of £113.5million and up from the inflow of £47.5million in March 2008.

While these figures suggest a bullish attitude amongst investors who are looking for better returns as savings rates fall to record lows, they have not thrown caution to the wind just yet, with the majority opting for Protected/Guaranteed Funds within the ISA sector.

"This year's ISA season saw significantly greater net investment than 2008," said Richard Saunders, chief executive of the IMA, commenting on the figures. "At the same time the strong inflows into bond funds of the last few months have been maintained. As a result, net retail sales for March were the highest they have been since April 2007."

© Fair Investment Company Ltd