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Appetite for risk increasing, research suggests

Last updated: 08:54 29 Jan 2014 EST, First published: 09:54 29 Jan 2014 EST

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Retail investors are showing more faith in the stock market and in particular riskier investments, latest figures suggest.

The Investment Management Association (IMA) revealed demand for equity funds outstripped other asset classes, with retail investors adding £11.4 billion in 2013 into these funds compared with £3.7bn the year before – the highest amount invested since 2000.

Money invested in equity funds contributed to half the total of £20.4bn, which rose from £14.3bn in 2012.

Institutional sales by contrast were £1.7bn, down from £8.4bn.

Total funds under management hit £770bn, a 16% increase on the prior year (£662bn).

Equity funds fared well at the expense of fixed-income funds, showing a shift towards riskier investments.

Interest in shares in the traditionally riskier AIM market has increased thanks to incentives such as their inclusion in tax-friendly ISAs, as well as stamp duty on AIM shares being abolished in April this year.

“Retail investors were highly active in 2013, committing an average of over £1.6 billion of new money to funds every month,” said IMA chief executive Daniel Godfrey.

“Equity funds took by far the largest share of the net inflows from investors. After a number of years with the strongest net sales, fixed income took no new money in 2013. Both mixed asset and property funds saw stronger inflows than in 2012.”

 

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