Global Equity Income was the second highest selling sector, but flows were much stronger in the first half of the year over the second half. The third and fourth quarters saw more cash deployed into property funds.
There were steady inflows into North America throughout 2013 as economic recovery gained momentum. The Global Emerging Markets and Global Bonds sectors started the year as best sellers, but significantly tailed off in the second quarter after the Federal Reserve announced plans to taper quantitative easing.
In the second half of the year, UK Smaller Companies and Japan funds become the sectors of choice for investors wishing to take more risk. Graham Venn, head of commercial at Cofunds, said that the UK sectors might find favour on the back of the strong performance of the UK economy in 2014.
No bond sectors appeared in the top five for the third or fourth quarter as the prospect of higher interest rates started to dent the popularity of fixed income. Prior to that, strategic and global bond funds had still been popular among investors.
The average fund in the mixed investment 20-60% shares sector rose 8.8% over 2013, with those funds with higher equity exposure producing the strongest performance. The top funds over the year were the Kames Ethical Cautious Managed, the Standard Life Dynamic Distribution, the Premier Multi-Asset Distribution and the Artemis Monthly Distribution funds.
