Broken up by region, global equity funds topped the list for its sixth consecutive year amassing net retail sales of £4bn.
The UK region was the second best-selling in 2013 with net retail sales at £2.9bn, a giant leap up after slumping to the worst-selling category for equity funds in 2012, registering an outflow of £944m.
European equity funds were the third best-selling in 2013 with net retail sales of £2bn, the highest since 2000. These funds were the second worst-selling in 2012 when they saw an outflow of £478m.
Further IMA statistics show that net retail sales stood at £20.4bn, up 43% from £14.3bn in 2012. Meanwhile funds under management were at a record of £770bn, up 16% from 2012.
“No surprise”
A steep increase in equity funds are no surprise, given soaring equity in developed markets supercharged by the tailwinds of central bank stimulus programmes, according to Bestinvest.
With positive results backing 2013, it makes sense for investors to exercise some caution for 2014. Most importantly, the environment for 2014 will be driven by the Federal Reserve winding down QE, causing market expectations to dwell on eventual interest rate hikes in the US and UK.
"After years of ultra-cheap money, markets are now on the path to ‘normalisation’. But that journey could be a rugged one with consequences across global asset classes and markets. QE has been akin to a course of powerful drugs which have been administered to sustain a patient (the US economy), but now the patient is recovering they need to be carefully weaned off the drugs to which they have become addicted,” Jason Hollands, managing director at Bestinvest, said.
He added that while emerging markets may present a value opportunity for truly long-term investors, they also are a potential value trap as they feel the impact of tightening and could well experience further volatility.
Therefore near term opportunities may be closer to home, in the UK and European equities.
