Daniel Godfrey, The Investment Association Chief Executive, said:
"With the uncertainty of the election over, investors seem to be taking a more positive view on UK equities. However, UK equity income funds continue to be the driver of inflows, highlighting an ongoing preoccupation with yield among investors in a low interest rate environment."
Equity was the best-selling asset class in May 2015 with net retail sales of £802 million - the highest since December 2014. This contrasts with the previous month's figures which showed outflows of £92 million from equity funds.
Property continued to attract a steady flow of funds with net retail sales of £269 million, making it the second best-selling asset class.
Fixed income funds, which were the best-selling in April 2015, became the worst-selling in May seeing their first outflow since January 2014 at £162 million.
NET RETAIL SALES OF EQUITY FUNDS BY REGION
European equity funds continued to be the best-selling for the third consecutive month in May with net retail sales of £396 million.
UK equity funds saw positive inflows (£284 million) for the first time since December 2014. For the first four months of 2015, these funds have seen higher than usual outflows in net retail sales.
Global equity funds were the third best-selling with net retail sales £188 million, this is the lowest since August 2014 (£84 million).
North American and Asian equity funds both saw net retail outflows of £56 million and £85 million respectively.
THE INVESTMENT ASSOCIATION SECTOR RANKINGS
UK Equity Income with net retail sales of £419 million, the highest since December 2014.
Targeted Absolute Return with net retail sales of £317 million.
Europe Excluding UK with net retail sales of £271 million.
Property with net retail sales of £269 million.
European Smaller Companies with net retail sales of £124 million.
The worst-selling Investment Association sector in May 2015 continues to be UK All Companies, now the worst-selling sector for five consecutive months, experiencing a net retail outflow of £182 million.
In May, UK fund platforms continued to see the highest gross retail sales at £6.6 billion, representing a 52.8% market share (53.3% in May 2014).
Gross retail sales for Other Intermediaries (includes Wealth Managers, Stockbrokers and IFAs) totalled £4.7 billion in May representing a market share of 37.8% (39.0% in May 2014).
Direct gross retail sales in May were £1.2 billion, representing a market share of 9.4% (7.7% in May 2014).
FUND PLATFORM PRODUCT SALES
For the five fund platforms that provide data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) net sales for May 2015 were £1.0 billion.
ISAs had the highest net sales at £443 million, followed by Personal Pensions (£374 million), Unwrapped (£216 million) and Insurance Bonds (£23 million).
For the same five fund platforms, funds under management as at the end of May 2015 were £199 billion, compared with £172 billion a year earlier.
In May 2015, net retail sales of funds in ISAs provided by fund companies and the five fund platforms that provide data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) were £361 million, compared to £71 million in May 2014.
The top three best-selling sectors for ISAs based on the five fund platforms were:
UK Equity Income (£118 million net sales)
Property (£42.9 million net sales)
Mixed Investment 20-60% Shares (£42.6 million net sales)
FUND OF FUNDS
Net retail sales for funds of funds in May 2015 were £379 million.
Funds of funds invested with different asset management firms saw net retail sales of £269 million, compared to net retail sales of £110 million for funds of funds invested into the same firm's funds.
Funds under management for funds of funds were at £107 billion at the end of May 2015, accounting for 11.9% of industry funds under management, compared with 11.4% in May 2014.
Tracker funds saw net retail sales of £333 million with funds under management of £109.0 billion as at the end of May 2015. Their overall share of industry funds under management was 12.1%, compared with 10.0% in May 2014.
Net retail sales of ethical funds were £31 million in May 2015. Funds under management were £10.2 billion at the end of May, representing a 1.1% share of industry funds under management.
OVERSEAS DOMICILED FUNDS
In May 2015, there were net retail sales of £106 million of overseas domiciled funds.