The name's bond funds, £1bn bond funds...

INVESTORS piled more than £1 billion into bond funds last month as the level of assets in UK investment funds reached an all-time high, new figures show.

Funds under management hit a record 516.1 billion in August, according to the Investment Management Association (IMA), which said the figure reflected a combination of robust inflows and recovering markets.

Net retail sales - investments minus redemptions - reached 2.3bn last month, the highest August on record and above the average of 2.1bn for the past 12 months.

Net retail sales have now exceeded 2bn for 14 of the past 17 months and total 15.5bn for the year to date, just short of the record of 16.1bn in the same period last year. But net sales of individual savings accounts (Isas) dropped to 157 million, the lowest figure for a year.

Sales of bond funds returned to the peak levels seen in the first half of 2009, reaching 1.2bn, the highest since May last year. Another 479m went into equity funds in August, below the monthly average of 596 for the last year despite stock market stability during the month.

Richard Saunders, chief executive of the IMA, said "Although year-to-date sales are slightly behind the record levels of 2009, consumers continue to show a strong appetite for investing in funds. Bond fund sales in August once more reached the peaks experienced in the first half of last year, surpassing the 1bn mark for the first time since May 2009."