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Information: Embargoed 12.00pm Monday 27 April 1998

Unit trust PEP sales hit a record £7.3 billion in 1997/8 tax year

• March net unit trust PEP sales of £1.5 billion making record tax year total of £7.3 billion

• Record March unit trust gross retail sales of £2.8 billion

• Net retail total of £1.4 billion 30% ahead of March 1997

• Number of regular savers 1.5 million

• Total funds under management £ 180 billion

Total gross sales of unit trusts and open ended investment companies (OEICs) in March passed the £4 billion mark for the first time in any one month to reach £4.3 billion. The month's retail fund sales were at their highest level ever, £2.8 billion, while institutional fund sales at £1.4 billion hit their 3rd highest level ever. Regular saving plan sales for the quarter continued their relentless rise, to a high of £373 million, with the number of accounts hitting a peak of 1.5 million by the end of March.

A post Budget rush into PEPs accounted for a large part, 63%, of March's record gross retail fund inflows. The month’s net retail total reached £1.5 billion, up from £1.1 billion last March, with the first 5 days of April adding a further £728 million. This took the net PEP total for the complete 1997/8 tax year to a new high of £7.3 billion compared to £6.2 billion in the last tax year.

The two mainstay fund types, UK Growth and UK Growth and Income, led the march into investment funds during the month. Private investors placed record total amounts of business in the UK Growth and Income sector both via independent intermediaries and direct. The sector’s £233 million of direct PEP sales, mainly of index funds, represented an unprecedented contribution from the direct buyer to the monthly PEP total.

Within the UK Growth sector, gross sales hit a record for each of the main retail distribution channels, £235 million for IFAs, £261 million for company salesforces and £112 million from the public direct. For the latter two channels, PEPs accounted for most of the volume.

Institutions also bought significantly into the UK Growth and Income sector, at £242 million the most ever in one month, although a repurchase by one life company of approximately £650 million, moving clients from unit trusts into internal funds, brought the net institutional total for the whole of March down to a large negative balance.

Apart from the generalist UK sectors above, including the UK Equity and Bond sector which saw somewhat of a return to favour by retail investors during March, it was purchases of European funds which helped to underpin the huge overall level of sales. IFAs and company salesforces broke through their previous highest monthly levels for these funds by nearly 100% in both cases, while pension funds on the institutional side also fed a record £180 million into the sector. The other favoured geographical centre was North America, where high inflows came from private investors, via private client sales as well as through institutional investors, taking net new investment in the sector to its highest ever level of £128 million. Outflows continued from Far Eastern funds.

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

"As we suspected, once the uncertainty over ISAs was removed by the budget, investment funds proved more popular than ever with the UK saver.

The growth in regular savings plans is also very important. It shows that increasing numbers of people understand the need for commitment when saving for long term goals such as pensions and mortgages."

Regular Savings Plans: Q1 1998

Plan Holders:

Sales: £mn

Summary table: March 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
Brian Harvey, Head of Statistics  AUTIF  0171 831 0898

Notes to Editors:

Best selling funds in March
Net Retail Sales
UK Growth, UK Growth & Income                  

Net Institutional Sales
Europe, North America

Worst selling funds in March
Net Retail Sales
Japan, Far East Excl Japan                                 

Net Institutional Sales
UK Growth & Income,  UK Growth

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 - March 1998

3. Retail gross - March 1998

4. Retail repurchases - March 1998

5. Retail net sales -March 1998

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

Charts

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