Responsible investment funds saw over £1bn of inflows in June and a total of £4bn for the second quarter, the highest level of quarterly inflows since data was first collected, according to the latest data from the Investment Association.

Total net retail sales across all fund sectors for June were £4.2bn.

Tracker funds also saw strong inflows in June, with net retail sales of £2.2bn.

With many investors fearing a rise in inflation, the newly launched Global Inflation Linked Bonds sector was the highest selling fixed income sector at £214m. This inflow is 4% of the sector’s funds under management of £5.6bn.

Chris Cummings, chief executive of the Investment Association, said: “The positive inflows for the first half of the year are a clear sign of the strong economic recovery and growing investor confidence as we emerge from the pandemic.

“If the pace of net sales continues at the same rate, we could be on track to match the record-breaking inflows of 2017. However, investors also have one eye on inflation, which may have a greater impact in the second half of the year.”

According to investment platform AJ Bell, the strong inflows into retail funds for the first half of the year reflect increased consumer confidence in vaccines combatting the Coronavirus pandemic.

Laith Khalaf, head of investment analysis at the platform, said: “The success of vaccines in combatting COVID has given investors the confidence to go out and buy billions of pounds of investment funds. This is probably also an after-effect of the massive build up of consumer bank balances in 2020 as lockdowns curtailed spending, and the fact that cash is still yielding next to nothing, with inflation is on the rise.

“Indeed it’s notable that Global Inflation Linked Bond funds saw significant inflows in June as investors positioned themselves for the possibility of an inflationary period.

“In the equity space, Global funds continue to dominate proceedings, while the UK was the only region to see outflows. The Chancellor and PM this morning proposed an ‘investment big bang’ to get UK money flowing into private UK companies. But judging by these figures, investors still can’t be tempted into fully listed UK stocks, let alone higher risk and lower profile unquoted companies.”