Market confidence appears to be bouncing back as retail funds cash in

PRIVATE investors are regaining confidence in markets, figures published yesterday revealed. Net sales of retail investment funds were the best for a year in April at £1.54 billion, according to the Investment Management Association, while investments in retail funds rose 4 per cent.

The third consecutive month of fund inflows followed three months of investors selling out of funds, including record outflows in January as the credit crunch hit investor confidence.

Property funds also bounced back, with inflows of £70 million reversing four months of outflows.

But of the £1.54bn pounds invested in retail funds, £630m went into bond funds and £478m into equity funds, suggesting investors remain cautious. The UK All Companies sector was the least loved, suffering net outflows of £182m.

Net ISA sales reached £391m in April, up from £68.6m in March, although they were down 31 per cent on the corresponding month last year.

But Richard Saunders, chief executive of the IMA, said he was encouraged by the overall improvement. "After two extremely modest quarters, net retail sales bounced back in April to £1.5bn, the best performance for a year. Property funds reversed recent outflows, recording positive flows of £70m."