The Investment Management Association has announced that the value of investment funds under UK management is reaching record levels, with a growth of almost 20 per cent in the last year.

According to the Association's latest figures, the total value of investment funds under UK management grew from £250 million in last June to a recorded £298 million last month.

Sales of bonds accounted for £258 million of the total net sales of £448 million last month. The sales of ISAs are still declining, with only £62 million sold in June – half the amount of a year before.

However, the chief executive of the Investment Management Association, Richard Saunders, believes these new figures hold good news for the investment sector.

He pointed out that despite a fall in net ISA sales in June, net retail sales of unwrapped investment funds almost doubled from the previous month.

Mr Saunders claimed that a strong market showing during June is boosting the value of investment funds.

Financial analysts have blamed the slump in ISA sales on the announcement last year by chancellor Gordon Brown, proposing that tax credits for investors should be cut.

This is believed to have put many potential investors off the idea of buying stock market ISAs, even though it has not been proposed in this year's Budget.