The IMA's February Isa sales figures show an 81% drop over those recorded at the height of the ...
The IMA's February Isa sales figures show an 81% drop over those recorded at the height of the market three years ago.
Its latest monthly statistics show that February 2003 brought in £193m net, a long drop from the equivalent figure of £1.03bn in February 2000.
While this February's figure was low, sales were up on January's £158m net, but down on 2002's February sales by £126m.
Intermediaries' share of Isa sales declined in February to 26% from 28% in January while sales forces and tied agents accounted for 50% of Isa sales and 26% of overall fund sales. The direct channel accounted for 18% of Isa sales and 11% of all retail fund sales.
In February, total industry net sales rose to £507m, up from £394m in January but down from £1.09bn in February 2002. Overall net retail sales fell to £194m from £670m in February last year.
February witnessed little change in sector popularity with corporate bond funds still attracting the majority of retail investment with £491m.
The least popular funds with retail investors were Europe ex UK and North America. On the institutional side, the best sellers were UK gilt and global growth while UK corporate bonds and UK smaller companies showed the poorest sales.
Clare Arber, head of communications at the IMA, said: 'Investors remain wary and sales continue to run at significantly lower levels than in recent years. It is too soon to predict how this year's Isa season will turn out.'
Paul Locke, analyst at HSBC noted that net retail unit trust sales of £194m are down against a revised £222.5m in January 2003.
He said that the level of repurchases actually fell during February 2003 but this proved insufficient to offset a further decline in gross sales for the month, meaning net retail sales have now declined for four consecutive months, reaching their lowest point since September 2002.
Locke added: 'At the sector level, many of the same trends continue, with strong demand for UK Income products and, on the reverse, European and to a lesser extent, Japanese equities remaining firmly out of favour.
'More optimistically, many emerging market spheres continue to buck this trend, with firm, if not stupendous demand for both the Latin American and Asia ex-Japan equity asset classes. UK smaller companies has undergone a reversal since the minor inflow of December 2002, with net outflows surging to almost £70m for the month, representing the second highest net outflow by sector during February.'
Arber added that February's sales figures reinforce the view that now is exactly the wrong time for the Government to take away the tax credit on the equity Isa.
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