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Information: Embargoed 12.00pm Monday 23 February 1998

Unit trust retail sales slow in January

• Total industry funds under management £163 billion
• Total January PEP sales up 5% on January 1997 and almost level with last month - net PEP sales for the month £242 million from £279 million in December
• Net retail sales £285 million, down £96 million on last month and £11 million on last January, gross retail sales up 4% on last year
• Unit trust unitholder accounts approaching 10 million

Gross retail sales of unit trusts in January reached just over £1 billion, £36 million short of last month’s total but 4% ahead of January 1997 and 1% ahead of January 1996. In addition an increase in the level of redemptions from last month produced a net retail unit trust inflow of £285 million, as against £381 million in December.

After close to a year of domination by UK Growth and Income funds as the most popular retail choice of fund, the UK Growth sector for the second month in succession has crept into the top slot. Net retail sales of UK Growth unit trusts in January accounted for 35% of all net retail sales and hit £100 million, a substantial £85 million of which was purchased through company salesforces. Nevertheless, net retail sales of Growth and Income funds showed a slight increase on last month, £52 million compared to £44 million; while index funds also enjoyed a small increase, rising to £46 million from £39 million in December.

An analysis of the month’s PEP sales showed similar trends. Gross PEP sales at £460 million were ahead of last year, and almost level with last month’s £462 million; while higher redemptions brought net PEP sales down to £242 million from £279 million in December - partly reflecting the increasing maturity of the unit trust PEP market and investors taking advantage of PEPs’ flexibility in transferring across funds and across managers.

Institutional sales ended the month with an overall net outflow of £84 million, largely due to a number of one-off repurchases within the UK Smaller Companies sector. Continued large outflows from the Japan sector dragged the total down further, with £111 million of institutional repurchases as well as £36 million redeemed by private investors. Institutions, however, showed a renewed interest in the two more general Far East sectors, with both experiencing small net inflows after a number of months of outflows. Philip Warland, Director General of the Association of Unit Trusts and Investment Funds (AUTIF), commented,

"There is growing evidence that consumers were spending rather than saving in January and unit trusts were not immune from this. Nonetheless it is clear that PEP sales have not been affected by the uncertainty over ISAs."

Summary table: January Unit Trust and PEP sales

For further comment please contact:

Philip Warland, Director General AUTIF 0171 831 0898
Anne McMeehan, Director of Communications  AUTIF 0171 831 0898
Emma Weiss, PR Manager AUTIF 0171 831 0898
Brian Harvey, Head of Statistics AUTIF 0171 831 0898

Notes to Editors:

Best selling funds in January
Net Retail Sales
UK Growth, Other UK Fixed Interest        

Net Institutional Sales
Europe, UK Growth & Income

Worst selling funds in January
Net Retail Sales
Japan, UK Smaller Companies                    

Net Institutional Sales
UK Smaller Companies, UK Equity Income

New sector:
January’s unit trust sales include figures for the new Managed Fund sector which was launched during the month. A full list of the sector definitions can be obtained from AUTIF.

PEPs:
The tables detailing stocks and flows via PEPs relate to plans operated by unit trust managers only and not to plans operated by all PEP Plan Managers.

1. Summary of total unit trust and PEP sales - 1990 to 1998
2. Sector summary - January 1998
3. Retail gross - January 1998
4. Retail repurchases - January 1998
5. Retail net sales - January 1998
6. Institutional business - gross, repurchases and net sales - January 1998

Charts

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