IMA

Investec's Alastair Mundy has raised the cash weighting in his £2.3bn Cautious Managed fund to over 20% as he struggles to find buying opportunities in equities or bonds.

The return of high-profile funds to the top of the performance charts is shaking up the UK equity rankings, just as the asset class returns to favour.

EQUITIES

Assets under management in the UK funds industry reached a record £658bn in 2012 and, although fixed income dominated overall sales, equities ended the year as the best-selling asset class.

Neil Veitch, manager of the SVM World Equity fund, has benefited from increasing exposure to financials in the last six months, as the loosening of Basel III requirements for banks has boosted the sector.

The CF Miton Special Situations and CF Miton Strategic portfolios have fallen from the top of the IMA Flexible Investment sector to the bottom on a one-year view because of the managers' view on equities.

UK bond investors should be wary of rising inflation and consider diversifying to other markets, according to PIMCO fixed income MD Mike Amey.

Ecclesiastical‘s Higher Income fund, managed by Robin Hepworth has moved out of the IMA UK Equity and Bond Income sector, into the Mixed Investment Shares 40-85% sector.

Analysts at HSBC have suggested the popularity of balanced funds towards the end of 2012 was due to advisers attempting to maximise commission income before the implementation of new rules following the Retail Distribution Review (RDR).

2012 was a particularly tough year for some sectors, notably commodities and gold, as fears over global growth weighed on demand for materials.