ISA sales plummet by half

Net Individual Savings Accounts (ISAs) sales this February were less than half of those last February.

Morningstar.co.uk Editors 3 April, 2002 | 1:09PM
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Only £319.3m of net ISA sales were recorded this February compared with £646.8m at the same time last year according to the latest figures released by the Investment Management Association (IMA).

This was up £43.7m from January of this year but this increase was the result of a normal seasonal effect. The sale of ISAs tends to rise as the end of the tax year in April approaches but this year’s increase was not only from a lower base but also by a smaller percentage.

Net sales of ISAs in 2001 rose 25.1% from January to February, to £646.8m, while over the same period in 2002 the increase was of 15.9% from January to February, to

£319.3m.

Reflecting a cautious investment approach retail investors favoured the UK corporate bond and UK equity income sectors, with total net retail sales totalling £163.5m and £144.4m respectively.

Institutional investors appeared more hopeful about a global recovery as in addition to the UK corporate bond sector recording £129.9m in net sales, the global growth category had £224.8m in net sales.

The worst selling funds for retail investors in February were those in the UK smaller companies and UK equity & bond income sectors while institutions shunned the Europe excluding UK and the active managed sectors.

Fund supermarkets made about £60m of net ISA sales in February, up from about £40m in January. The IMA also announced that it would begin collecting systematic data on fund supermarket sales. Some £1 billion in ISA funds is under management through these supermarkets.

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