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Information: Embargoed 12.00 Monday 24 August 1998

Industry sales levels maintain momentum in spite of stockmarket setbacks in July

• July gross sales figures up 7.43% on June and up 35% on July 1997

• Gross PEP sales up 12.7% on July last year

• Total funds under management hold steady at £188 billion

• Number of accounts rises to 10.75 million

In spite of the onset of a distinct chill in stock market sentiment in the second half of July, investment fund business levels held up well. Net retail business dipped slightly in comparison with the previous month, but as this tends to be a seasonal occurrence, it is as likely to have been brought about by the start of the holiday season as opposed to any specific reaction to gloomy news sweeping in from the Far East. Repurchase levels for July followed the same pattern established in the preceding four months, but neither total funds under management nor PEP funds under management wavered much, ending marginally up on the previous month.

Retail investors continued to favour the UK Growth, Europe and UK Growth and Income sectors and, whilst Direct, IFA and Sales Force business slipped slightly, Private Client business was the notable exception, rising some 55% on June, favouring in particular the International Growth and International Equity Income sectors. Institutional investors on the other hand gave a marked ‘thumbs up’ to the International Growth sector, with sales at eight times the level of June. Europe continued to be a firm favourite.

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

"On the whole investors appear to have been remarkably unmoved by the tide of events that started to take a grip of global markets in the latter part of July. Whether this continues to hold true for August has yet to be established, although anecdotal evidence from AUTIF’s member companies suggests that retail customers are remaining pretty stoical, with some of the more adventurous seeing this as an opportunity to buy in at lower prices."

He continued:

"What is absolutely clear from last month’s statistics is that there is no hint of panic. Savers are sitting on reasonable returns since the beginning of the year, let alone from three or five years ago. What the market turbulence probably has done is convince many people who ought to be saving for the long-term that the stockmarket is not for them. They would benefit from funds with protective features and it is a matter of continuing regret that the Government is refusing to allow some UK funds with protection into ISAs, thus driving the business offshore."

Summary table: July 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

Notes to Editors:

Best selling funds in July
Net Retail Sales                                   Net Institutional Sales
Europe, Other UK Fixed Interest         Intl Growth, UK Growth & Income

Worst selling funds in July
Net Retail Sales                                   Net Institutional Sales
UK Equity Inc, Far East Excl Japan     Far East Excl Japan, UK Smaller Co

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 - July 1998

3. Retail gross - July 1998

4. Retail repurchases - July 1998

5. Retail net sales – July 1998

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

Charts

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