Investors poured hundreds of millions of pounds into equity funds last month, making stocks the leading asset class for the second month in a row, according to the UK's Investment Management Association.
The IMA said net retail sales of £550m in October were the highest since April, in contrast with an average outflow of £9m over the past 12 months. It said the shift suggested that the tide was turning in favour of equities.
Some of the world's largest investors have increased their exposure to stocks because of cheap valuations and growing confidence over earnings.
Aberdeen Asset Management, Schroders and Henderson Global Investors are all backing equities as many of their funds increase exposure to stocks.
Martin Gilbert, chief executive of Aberdeen, which enjoyed strong results this week because of its equity inflows, said: "I do not believe equities are dead. We are seeing strong demand for equities."
Didier Duret, chief investment officer of ABN Amro private bank, said: "We went overweight in emerging market equities and European equities in September as we like the valuations and the prospects for strong earnings."
David Coombs, head of research at Rathbones Investment Management, said equities were helped because bonds were expensive. "We have been reducing exposure to bonds and increasing equities. When we talk to clients we say that the risk/reward on corporate bonds does not look very attractive now," he said.
Read the entire article here.
