Investment fund sales hit their highest level on record during August, figures show, in a sign that consumer confidence is continuing to increase.

The Investment Management Association found that unit trusts and OEICs (open-ended investment companies) reached a net sales amount of £2.17 billion, well up on the 58.7 million invested in the same period last year.

The association highlighted an upturn in strong inflows as the reason for returning confidence, as net sales reached £15.9 billion during the first eight months of the year.

ISAs added to the good news with a rise in net sales to £150.6 million in August. Net sales strips out measures like people cashing in investments or moving them elsewhere.

It was the six consecutive month that payments into the tax-free funds have increased, following five years in which consumers withdrew more than they paid into the products.

Richard Saunders, chief executive of the IMA, said: "Investors continued to add to their holdings in August, as they have been doing all year so far.

"It is particularly encouraging to see investors making use of ISAs again. After five years of withdrawals from ISAs, we have now had six months of net inflows."

Bond funds continued to be the most popular asset class, accounting for 34% of sales, followed closely by equity funds at 32%, the popularity of which has increased since the beginning of the year as the stock market has picked up.

Inflows into property funds totalled £129 million in August, the highest level of investment into the sector since June 2007.

But despite the strongest ever level of sales during August, sales of investment funds were still lower than in July, when they reached £2.3 billion, as investor activity suffered its traditional August dip.

The total value of funds under management, including money held for institutional investors, rose to £439 billion in August, its highest level since May 2008 and 6% higher than in July.

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