Retail fund sales plummet

Net sales of investment funds to private investors were down by nearly two thirds last month compared with January 2002.

Morningstar.co.uk Editors 26 February, 2003 | 3:24PM
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Retail investors bought a net £217m last month compared with £610m in January 2002 according to the latest figures from the Investment Management Association. Sales of Individual Savings Accounts (ISAs) accounted for £157m of the total.

Although private investors are still net buyers of funds the figures were disappointing. Normally the market would expect to see an increase in sales from December to January as the ISA season gets underway. Yet net retail sales fell £52m from December.

Institutions were not immune to the downturn with net sales of £175m, a £140m drop from December. However, this figure was up from January 2002

when net sales where only £116m in total.

The UK Corporate Bond and the UK Equity Income sectors were the top retail sellers last month with net sales of £246m and £47m respectively. At the other end of the spectrum investors took a net £90m out of funds in the Europe excluding the UK sector and a net £20m out of UK Equity & Bond Income funds.

Institutions favoured funds in the UK All Companies and North America sectors. Far East excluding Japan felt the brunt of repurchases, losing a net £192m in sales last month alone. The second worst seller was UK Smaller Companies with a net loss of £45m.

These weak sales figures, as well as lower share prices, are reflected in the falling funds under management in the industry. Funds under management dropped to £184 billion last month, down from a high of £261 billion at the end of 2000.

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