Savers opting for fixed income investments

Investors are choosing fixed income over equities, according to new research from the New Star Asset Management.

10:45 25 January 2005

Investors are choosing fixed income over equities, according to new research from the New Star Asset Management.

The UK fund house's latest survey found that, if given 10,00 to invest, 16.5 per cent of investors would select a UK bond fund as their top choice for investment.

Only 12.8 per cent would choose an equity-based investment fund.

Buy a far greater number (39.2 per cent) said that, in the run up to ISA season, they did not know where they would invest the 10,000.

New Star said this shows that investors remain uncertain about the prospects for equity markets.

Rob Page, marketing director at New Star Investment Funds, commented: "Income, be it from equities, bonds or commercial property, continues to be the major trend in 2005.

"Although most people still aren't sure where to put their money, investors are definitely leaning towards fixed income funds. This might seem surprising given the strong performance of equity markets, but investors are still drawn to the greater security of bonds."

But for those yet to make up their mind, Mr Page offered some advice.

"Investors who are undecided whether to go for equities or bonds could consider choosing a fund such as a Distribution Fund, which invests in both equities and bonds, and seeks to create long term income and capital growth."