After proving the least popular fund grouping in February – with net outflows of £363m, according to Investment Association (IA) statistics – the trade body’s latest numbers show the IA Short-Term Money Market sector jumping to the top of the UK retail investor charts, attracting net inflows of £666.6m.
Rather than any possible sign of the devil, however, this seems more likely to be an indication that investors are taking their foot off the risk pedal – especially given the March data also reveals net flows into the IA £ Corporate Bond sector almost doubling, month on month, from £279m to £529m.
See also: Corporate bonds – high yield or investment grade?
Further underlining that possibility, the IA North America sector – the most popular fund grouping in January and February, with combined net inflows of more than £800m – actually saw a small net outflow (of £4m) in March, with equity investors apparently falling back to the Global sector, which attracted positive net inflows (of £365m) for the first time this year.
So is the IA’s latest data a sign that, following something of a risk rally at the start of the year, investors are again turning cautious – and, in the process, forgiving UK corporate bonds for that unwelcome bump in the road last autumn?
In this month’s head to head, Emma Moriarty, an investment analyst at CG Asset Management, discusses the role corporate bonds can play in a multi-asset portfolio, while Stuart Chilvers, lead manager of the Rathbone High Quality Bond Fund, explains his optimism on the outlook for investment grade bonds.
Read the full article in Portfolio Adviser’s June 2023 magazine
