Investors took advantage of the coronavirus sell-off across markets by investing £4bn into retail funds in April, according to the latest data from the Investment Association, with more than £2bn finding its way into equity strategies. 
The rapid spread of coronavirus in March and the introduction of lockdown measures across the world to contain it saw markets and investor risk appetite slump, resulting in a record £10bn of outflows from UK retail funds during that month.
However, April saw sentiment improve as authorities announced measures to support economies and combat the spread of the coronavirus.
As such, UK retail funds benefitted from inflows of £4.2bn in April, with £2.4bn invested into equity strategies following broad falls in markets across the world in March.
Bond funds also garnered £903m in assets in April, suggesting that some of the record redemptions in March (when £7.4bn left the strategies) returned.
Fixed income strategies bore the brunt of the previous month’s outflows with investors generally avoiding taking money out of equity funds at low valuations and portfolios were rebalanced.
Net retail sales
Source: Investment Association
Chris Cummings (pictured), chief executive of the Investment Association, said: “After record outflows from the fund market as global lockdown measures began in March, savers returned to put £4bn into retail funds in April."
The most popular sector in April was IA Global, which had net retail sales of £1.2bn, followed by the IA UK All Companies sector with inflows of £874m.
Other top-selling sectors included IA Sterling Corporate Bond (£535m), IA Mixed Investment 40-85% Shares (£530m) and IA Sterling High Yield (£312m).
UK equity strategies attracted £1bn from investors with £106.2m finding its way to IA UK Equity Income funds and £32.9m invested in IA UK Smaller Companies strategies, joining the £874m going into IA UK All Companies.
Not all strategies experienced inflows, however.
The IA Targeted Absolute Returns sector recorded a net outflow of £491m during April. There were also significant redemptions in other sectors including: £237.1m from IA UK Gilts strategies, £174.8m from IA Global Emerging Markets Debt – Local Currency, £159.9m from IA Europe Excluding UK and £148.8m from the IA Global Equity Income.
Europe wasn’t the only developed market-focused sector to see outflows with £62.8m pulled from the IA Japan sector and £39m from IA North America funds.
Active strategies also found favour among investors, with £2.7bn invested in April, as passive strategies rebounded with inflows of £1.4bn - up from £467m in March.
Another significant trend in April was record inflows into responsible investment strategies, according to Cummings.
“The crisis has brought a new momentum to the subject of responsible investing, with asset owners and retail investors asking more about their investment manager’s environmental, social and governance [ESG] approaches,” he said.
Source: Investment Association
Inflows into responsible investment strategies reached £969m in April, the highest monthly figure since the IA adopted Global Sustainable Investment Alliance investment definitions, which identifies the funds that follow one or more of the following: negative screening, positive screening, norms-based screening, sustainability-themed investing, and impact/community investing.
As such, funds under management in responsible investment strategies now stands at £28.8bn or 2.4 per cent of the industry total, the highest level under the new criteria.