By Adele Burton The number of consumers purchasing investment funds this year has fallen as inves...
By Adele Burton
The number of consumers purchasing investment funds this year has fallen as investors are either waiting for the market to change, waiting for more information or do not have the funds available to invest, according a report by the Association of Unit Trusts & Investment Funds (Autif).
The report surveyed 500 people who called the unit trust information service over a 12-month period.
Although fund management groups warn that past performance is not necessarily a guaranteed indication of future performance, the majority of participants said that their reasons for choosing a fund were mainly based on past performance and a good company record.
"Past performance is still an important factor in making investment decisions, but other considerations are coming to the fore.
"General fund information was found to be particularly useful, but the clarity of this literature is something consumers would like to see emphasised," Clare Arber, PR manager at Autif said.
To gain information on investment funds, 72% of investors prefer to read press articles, with less than 20% of participants using the internet. Two-thirds of investors looked at unit trust or open ended investment company (Oeic) general literature and 49% preferred to read press adverts.
"People are becoming far more active in obtaining information from a range of companies and sources before committing themselves to an investment," Arber said.
"With investors becoming increasingly more selective, management companies will have to keep on their toes if they are to attract new investors and satisfy existing customers," she added.
When asked their reasons for finding out about investment funds, 81% said it was to make their money grow.
"In addition, investment funds are still seen as alternatives to building society and bank deposit accounts, 59% said this was on of their main reasons for calling," Autif said.
Since the survey was launched in 1994 the overall number of female callers has increased. Last year the figure for women intending to buy a fund product rose from 36% to 45%.
The average age of female respondents is also younger than their male counterparts with 62% of female participants being under 54 compared with 48% of men.
"Women were well represented in London and the South of England, but there was also a significant number calling from Scotland this year. There were also more calls from women living in East Anglia compared to men," Autif said.
To view the survey, visit www.investmentfunds.org.uk.
Working with fintech InvestCloud
Subject to unitholder approval
Partner Insight: Introducing the Architas education series for clients.
'Fewer than 1% of firms PROD-compliant' - Rory Percival
'Left holding the can'