Funds under management up in Q2 2007

Funds under management at the end of Q2 reached £33 billion, up from £30 billion at the end of the previous quarter and an increase of 30% from the same quarter in 2006, according to the Investment Management Association (IMA). Balanced funds accounted for the majority of funds under management, representing 69% of assets, followed by 18% in equities.

Funds of funds - net sales

Total net sales were £1.2 billion in Q2, up from £820 million in Q1, and almost the same level as sales in Q2 2006. 59 per cent was invested in internal funds rather than in external funds. The most popular sector in Q2 was Cautious Managed, accounting for inflows of £566 million.

Tracker funds

Funds under management in Q2 2007 reached £27 billion, an increase of 4% from Q1 and 18% from the £23 billion in Q2 2006. Retail sales saw a net outflow of £12 million in Q2 2007, compared with an outflow of £4 million in Q1; the same quarter the previous year saw an inflow of £27 million. The most popular distribution channel for gross retail tracker sales was the intermediary channel accounting for 45% of sales.

Ethical funds

Ethical funds under management in Q2 2007 saw an increase from the previous quarter and reached £5.6 billion, an increase of 32% on the same quarter in 2006. Retail sales saw a net inflow in Q2 2007 of £138 million, compared to an inflow of £100 million in Q1; the same quarter the previous year saw an inflow of £26 million.

Sheila Nicoll, Deputy Chief Executive of the IMA commented: "Against a background of improved total net retail sales this quarter compared to last quarter, net retail sales of funds of funds have also picked up. Net retail sales of ethical funds have seen large increases every quarter for the last year, with sales in this quarter alone surpassing those for each of the last four years."