Investors ploughed £24bn into funds in the first half of 2021, according to latest Investment Association data.

Responsible funds now make up £1 in every £20 invested. Investors are also continuing to seek inflation protection from global inflation linked bond funds while UK equities are still seeing outflows.

Laith Khalaf, head of investment analysis at AJ Bell, commented: “The success of vaccines in combatting COVID has given investors the confidence to go out and buy billions of pounds of investment funds. This is probably also an after-effect of the massive build up of consumer bank balances in 2020 as lockdowns curtailed spending, and the fact that cash is still yielding next to nothing, with inflation is on the rise.

“Indeed it’s notable that global inflation linked bond funds saw significant inflows in June as investors positioned themselves for the possibility of an inflationary period. Responsible fund sales also continue to swell, and this looks to be a trend that still has plenty of renewable fuel in the tank.

“In the equity space, global funds continue to dominate proceedings, while the UK was the only region to see outflows. The Chancellor and PM proposed an ‘investment big bang’ to get UK money flowing into private UK companies. But judging by these figures, investors still can’t be tempted into fully listed UK stocks, let alone higher risk and lower profile unquoted companies.”

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