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Information: Embargoed 12.00 Monday 27 July 1998

Regular saves maintain bouyancy of fund sales

• Retail fund net sales increased 16.5% year on year

• Regular savings contributions rose 53% year on year

Retail net sales remained buoyant in June at £726 million, just over £100 million more than June last year. They followed the usual seasonal pattern of being lower than in May.

Overall net sales were exceptionally low as the institutional sector showed a net outflow, largely as the result of two major switches (out of unit trusts but not necessarily out of the market).

The quarterly data shows a market increase in the use of regular savings plans. PEP savings accounts for the end of June ‘98 stood at 1.55 million, a 53% increase on the number held at the same time last year. Similarly, regular contribution PEP sales rose to £352.2 million, a 53% increase on the £232.1 million for the same period last year. In fact, the number of PEP regular savings accounts has almost tripled in two years, (584,000 to 1.55 million 2^nd quarter 1996 to 2^nd quarter 1998), whilst non-PEP accounts have also risen, albeit less dramatically, by 46% (158,000 to 230,000).

Gross retail sales demonstrated an ongoing preference for the UK Growth sector, with the European sector not lagging too far behind, accounting for 20% and 16% of total gross retail sales respectively. The institutional position tipped the other way, with Europe taking the lion’s share of 24% of total institutional sales, whilst the UK Growth & Income sector came second with 22%.

Having reached an all time high at the end of May (£191 billion), total funds under management at the end of June slipped marginally to £187 billion, wholly the result of falls in the value of the underlying markets. ‘PEPed’ funds under management retained their relative position, accounting for some £47 billion under management. The number of unit holder accounts however, maintained a steady upward momentum, 10.5 million in May rising to10.6 million in June.

Philip Warland, Director General of the Association of Unit Trusts and Investment Funds commented:

‘Regular savers continue to find unit trusts and open ended investment companies a cost effective medium for the accumulation of wealth for the medium to long term. This is good news so far as the Government objectives for ISAs are concerned.

The UK and Europe continue to attract investors, intent on making the most out of seemingly unassailable positive equity market trends. Japan and the Far East remain least favoured sectors.

Regular Savings Plans: Q2 1998

Plan Holders:

Sales: £mn

Summary table: June 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
Susie Poote, Communications Assistant  AUTIF  0171 831 0898
Michael Quach, Head of Statistics  AUTIF  0171 831 0898
Dianne Archibald, Statistics Assistant  AUTIF  0171 831 0898

Notes to Editors:

Best selling funds in June
Net Retail Sales                                             Net Institutional Sales
UK Growth, Europe Europe,                         UK Growth & Income

Worst selling funds in June
Net Retail Sales                                            Net Institutional Sales
Far East Excl Japan, Far East Incl Japan       North America, Japan

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 - 1991 to 1998

2. Sector summary - June 1998

3. Retail gross - June 1998

4. Retail repurchases - June 1998

5. Retail net sales -June 1998

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

Charts

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