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Information: Embargoed 12.00pm Monday 30 March 1998

PEP sales pick up momentum in February

• Total industry funds under management jump £10 billion to £173 billion

• February net retail sales of £425 million up 45% on last month, compared to £484 million in February 1997

• February net PEP sales £375 million, 19% lower than last year but up 55% on last month

• Net sales of index funds to private investors up 89% on last month to £86 million; corporate bond PEP net sales up 24% to £58 million

A surge in investment in UK Growth unit trusts by private investors in February, especially into PEPs, brought fresh momentum into the unit trust PEP market and saw the month’s net PEP sales rise to £375 million from £242 million in January, while pushing February’s overall retail total £132 million ahead to £425 million. Gross PEP sales were also well ahead of last month, £633 million compared to £460 million, and £8 million higher than this time last year.

Company salesforces were key in driving the strong retail flows into UK Growth funds, making up a net £121 million of the £155 million total. In addition, of February’s overall net retail sales, the tied agent distribution channel commanded almost two thirds of the total.

It was direct sales of index funds, on the other hand, which helped to push the UK Growth and Income sector into the second most popular retail equity slot behind UK Growth. Of February’s £86 million net sales of index funds, which was up substantially on both last month and the same period last year, over half was purchased by the public direct.

Philip Warland, Director General of the Association of Unit Trusts and Investment Funds (AUTIF), commented,

"The pattern of PEP sales this year is very similar to 1997. We are unsure whether the slight reduction in sales in recent months is due to many people opening PEPs for the windfall shares last summer, or to uncertainty ahead of the Budget announcement on ISAs. Anecdotal evidence suggests sales did pick up after the Budget and a long term framework for ISAs will be very helpful to people planning their savings."

On the institutional side, a resurgence of interest in European funds, reflected also by retail investors, buoyed the overall institutional total for February. A net inflow of £93 million into Europe was balanced by a net outflow of £95 million from the UK Smaller Companies sector, leaving the overall institutional position with a net £5 million overall. Japan funds continued to experience heavy redemptions.

Summary table: February Unit Trust and PEP sales

For further information 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 February
Net Retail Sales
UK Growth, Other UK Fixed Interest                

Net Institutional Sales
Europe, UK Growth and Income

Worst selling funds in February
Net Retail Sales
Far East Exc. Japan, UK Smaller Companies    

Net Institutional Sales
UK Smaller Companies, Japan

New sector:
February’s unit trust sales include figures for the new Managed Fund sector which was launched in January. 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 - February 1998

3. Retail gross - February 1998

4. Retail repurchases - February 1998

5. Retail net sales - February 1998

6. Institutional business - gross, repurchases and net sales - February 1998

Charts

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