Interactive Investor

A return to cautious optimism?

2nd March 2023 13:04

by Myron Jobson from interactive investor

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Interactive investor comments on Investment Association January data.

Arrows going in different directions

Data from the Investment Association (IA) today reflects a return to cautious optimism as equity and bond markets rallied in January.

Investors put £1.4 billion to work in funds, with bond funds posting the highest inflows in at £1.6 billion as investors sought higher yields from bonds. UK All Companies saw the highest outflow for the third month in a row.

Sam Benstead, Bonds Specialist at interactive investor, says: “Money moved into gilt funds and safer corporate bond funds as investors looked for steady income amid economic uncertainty. Bonds are finally offering a genuine alternative to equities and are attracting new investors. That’s little consolation for those who bought a year ago and saw big losses due to the impact of rising interest rates on bond prices.

“Fund investors are increasingly going global, which also reflects ii’s February data. Nevertheless, UK equities have been some of the top performers over the past year, and our own customers choosing collective investments flocked to the investment trust sector for their UK exposure. Dividend heroes City of London (LSE:CTY) and Merchants Trust (LSE:MRCH), which have 56 and 40 years of consecutive dividend increases respectively, were among the most bought in February.”

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Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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