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UK Fixed Interest continues to fall in popularity


UK Fixed Interest funds continued to decline in popularity during Q1 2011 according to the latest investment trends survey by Skandia. UK Fixed Interest funds remain the biggest seller via the Skandia Investment Solutions platform accounting for 22.9% of sales but this is down from 25.9% at the same point in 2010 and a huge drop from 34.2% in Q1 2009 when sales of UK Fixed Interest Funds hit their peak.

The most significant climber over the past year was the Global Specialist sector which gained an additional 3.7% share of sales taking its total share to 14.7% and making it the third most popular investment sector. Sales of UK Equity Funds remained strong at 20.1% making it the second most popular sector during Q1 2011 as it was at the same point a year ago.
Sales of Far East ex Japan, North American and Japanese funds all climbed slightly over the past year at the expense of Property and Cash/Money Market funds.  

Graham Bentley (pictured), Skandia’s investment expert, says: “Investors’ fear of equity markets continues to thaw slowly and as a result they are adjusting the mix of assets within their portfolios towards the more risky equity sectors at the expense of UK fixed interest funds and cash. UK Equity funds are always high sellers via the platform but we are seeing a concerted move towards overseas equities as investors look to widen their investment horizon and benefit from growth in less developed markets or those that are taking longer to recover from the global recession.
“In line with this it is interesting to see that the overall level of risk people are willing to take in their portfolios has crept up and is now at its highest since before the stock market crash. The risk scores over time show that investors didn’t react as drastically as one might expect by significantly lowering their risk level, suggesting that the majority of them are quite rightly investing for the long term. However, confidence is now clearly returning so it will be interesting to track this trend over time.”

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