ISA sales soared 25% in 2006/7 despite rumours of their apparent unpopularity, according to research from the Investment Management Association.
The IMA says net ISA sales during that 12 months were £2.5bn, up £500m from the previous year.
Richard Saunders, IMA chief executive, says: “The ISA season saw inflows of just under £1bn, an increase of 7% on the previous season.
“With net sales of £2.5bn for the tax year as a whole, there was a 25% recovery from 2005/6. Although ISA sales are still some way down from their peak, they do appear to be moving in a positive direction.”
The most popular sector during the season was UK All Companies, which accounted for almost a quarter of gross inflows, at 24%.
Fund supermarkets grabbed the lion’s share of ISA business with two-fifths of gross sales. Sales forces and tied agents accounted for a third.
However, intermediaries remained the most popular distribution channel for UK domiciled funds in March with 82% of gross retail business.
The IMA’s monthly statistics showed UK investment funds under management stood at £448m, climbing 17% over March 2006. UK ISA funds rose 10% over the same period to £53bn and were up 2% on February 2007 figures.
Total UK net retail sales were £1.2bn in March, with £836m invested in equities, and more than half - £471m - in property funds. Some £312m was invested in balanced funds.
Net ISA sales of UK domiciled funds were £534m in March, more than six times higher than February, but down 7% from March 2006.
However, a late flurry of interest from investors keen to beat the deadline for investing in a 2006-07 ISA saw net sales of £423m in the key April 1-5 period.
That was an increase of around a third on the equivalent period at the end of the 2005-06 ISA season when net sales totalled £321m.
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