Net retail sales for March were £379m, with fixed income, mixed asset and targeted absolute return funds seeing the strongest inflows.
Fixed income funds were the best-selling asset class with net sales of £235m, mixed asset funds were the second with net retail sales of £190m while money market funds were the third best with net retail sales of £141m.
Equity funds continued to struggle however, recording an outflow of £459m. This was largely offset by the continued popularity of tracker funds which had net retail sales of £393m.
The top three best-selling sectors for ISAs in March were UK Equity Income with £86m in net sales, Asia Pacific Excluding Japan with £49m in net sales and mixed investment 40-85% shares which recorded net sales of £29m.
The IA interim chief executive Guy Sears said: "Retail sales turned positive in March as investors sought to make the most of their pension contribution and ISA allowances ahead of the end of the tax year.
"Retail investors remained cautious and reduced their holdings in equity funds, looking instead to multi-asset, absolute return and fixed income products,” Sears continued. “It is a sign of the times, with changing pension regulation and uncertainty in the global economic outlook, that multi-asset and absolute return products have been popular with retail investors. These sectors have grown in recent years as our members have reviewed existing products and introduced new funds to meet investors’ changing needs.”
"Tracker funds also remained popular with retail investors, and now make up nearly 13% of industry funds under management,” Sears added. “Active and passive investment strategies can both play a part in helping people meet their investment goals."