IMA statistics reveal popularity of corporate bonds

Bond funds have registered impressive sales for March, according to a new data release from the Investment Management Association (IMA).

The industry group said that UK-domiciled bond funds enjoyed net inflows of £250 million last month, while £ Corporate Bond was the single most popular IMA-managed ISA class.

More generally, investment ISAs from private banks and other providers registered a net inflow of £321 million for March, up from the £112.5 million net outflow noted by the IMA for February.

It also beats the £47.5 million inflow experienced in March 2008.

March is traditionally strong for sales of ISAs, as it coincides with the end of the tax year.

Richard Saunders, chief executive of the IMA, commented: ’This year’s ISA season saw significantly greater net investment than 2008.’

He added: ’Strong inflows into bond funds of the last few months have been maintained.’

Company defaults are predicted to rise significantly with the economic downturn, pushing yields for bonds up and making corporate bond funds more attractive for investors.

Official GDP figures from the government show that the economy experienced a 1.9 per cent contraction in January-March 2009, the sharpest three-month decline since 1979.ADNFCR-2318-ID-19145568-ADNFCR