Fund sales for July were triple those recorded in March, traditionally the high point of the year ...
Fund sales for July were triple those recorded in March, traditionally the high point of the year as investors rush to use their outstanding Isa allowance.
While for many groups July and August were the strongest sales months of the year so far, in line with rising markets and improving sentiment, the majority said these improvements are from a low base after more than three years of bear market conditions.
According to figures from the IMA, total net sales hit £1.42bn in July compared to £476m in March.
The July numbers followed sales of £1.41bn in June and August is expected to herald a third consecutive month of strong net fund sales, suggesting a turnaround in investor sentiment after a three-year bear market.
Nick Wells, product and communications director at Artemis, said the Baghdad bounce in markets has helped improve market confidence and July has been the group's best net sales month of the year so far.
In the past two months, he noted, money has come into a range of the group's funds, including its New Enterprise and European Growth portfolios, the latter of which has grown from £56m at the start of the year to £104m.
Mark Skinner, managing director of New Star Asset Management, said there is no better encouragement for investors to return to the markets than the strong recovery witnessed since March.
Skinner added the majority of the group's money is coming via direct intermediary investment into its unit trust and Oeics rather than Isas and transfers.
However, according to the IMA's July statistics, the general level of net sales was almost dwarfed by repurchases during July, with investors cashing in £2.95bn, a 5.5% increase on the previous month's figure of £2.79bn.
Simon Ellis, head of UK retail at Hendersons, said while the situation is generally improving, a lot of the business being written is still through the direct sales force/tied agents avenue, namely banks and building societies.
Of the total industry Isa sales in July, half were in the corporate bond sector, of which 90% of the business was carried out through banks, he added.
In support of this, the IMA figures show while intermediaries accounted for two-thirds of gross retail sales, direct sales forces and tied agents remained the most popular distributors of unit trust Isas, accounting for 55%.
Ellis also believes the market is not witnessing a recovery in direct sales, as people in the direct market are still taking money out of the system.
Gordon Davidson, joint managing director of Jupiter Asset Management, said the group has actually noticed a small pick-up in the direct sales of its funds but he is wary of being too optimistic.
After a prolonged bear market and further interest rate cuts, Davidson argues that many investors are being forced back into the market as there is nowhere else to go.
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