Net retail fund sales rose to a four-year high of £20.8 billion last year, according to latest figures from the Investment Association. This helped fuel a record rise in assets under management from £771 billion to £834 billion.

Within this the property sector received record breaking inflows of £3.8 billion from investors and was the second biggest selling sector in 2014.

Meanwhile total funds under management in passive, index-tracker funds increased by 23.5% during the year to a record £93 billion, on another record £4.7 billion inflow.  

It was a mixed year for funds investing in the UK stock market. Investors' thirst for income in a low interest rate world saw UK Equity Income funds grab the biggest chunk of business with £6.3 billion of net retail sales (that's overall sales minus withdrawals).

By contrast, funds in the UK All Companies sector suffered a net outflow of £1.2 billion in 2014.

It was also not a great year for funds investing in other funds. So-called fund of funds and multi-manager funds saw their lowest sales in six years at £3.3 billion.

IA chief executive Daniel Godfrey (pictured) said: 'Investors continued to favour equity of all the asset classes in 2014, with UK equity income funds enjoying a seven month streak as the best-seller from June to the end of the year. However, property also had a strong year, breaking previous net retail sales records.'

citywire.co.uk