Following a big outflow the month before, small investors ploughed money back into funds last month, though the overall ISA season was down on the previous year.
All in all, the 2022 ISA season overall saw net inflows of £934mln, data from the Investment Association showed, with £683mln of inflows into funds in ISA wrappers in the month of April.
This compared to £1.4bn of inflows in April alone in 2021 and the £922mln average inflows for ISA season over the last five years, with this year being the third strongest ISA season in the past five years.
Some £553mln flowed into funds in April 2022, a small comeback after the outflows of £3.5bn recorded in March and the first-quarter total of £7.1bn outflows.
April’s top fund sector was Global Equity Income, with of £678mln of inflows, while responsible investment fund inflows increased almost 30% in April to £1.2bn from £935mln in March.
Fixed Income fund outflows were just £18mln in April after outflows of £3.3 billion in March as both the US Federal Reserve and the Bank of England raised rates, which tends to reduce the appeal of fixed interest payments on bonds relative to cash interest rates.
A solid ISA season was significant after one of the most challenging first quarters for retail fund flows on record, said Miranda Seath, head of market insight at the IA.
She noted that the Global Equity Income sector was the top-selling IA sector for the first time last month.
“This was not just driven by investors looking for alternative sources of income. As the outlook for equity growth weakens, investors have looked for funds investing in companies that pay good dividends consistently to top up the overall returns equity investors receive.”
Of the major fund platforms, shares in Hargreaves Lansdown PLC (LSE:HL.) were up 2% on Monday, while AJ Bell PLC (LSE:AJB) rose 0.9%.