Back to 1999 Press Release menu
Back to UK Business (monthly)

Information: Embargoed: 12.00 Monday 25 January 1999

£21 BILLION RETAIL INVESTMENT FUNDS SALES IN 1998

• Funds under management end year at £183 billion, 16% up on the previous year. PEP funds under management represent 26% of the total
  

• 1998 record £11 billion total PEP sales, 18% up on 1997
  

• December net retail sales of £596 million 35% ahead of December 1997; net PEP sales of £368 million 30% ahead of the previous year
  

• Q4 regular plan sales of £451 million accounted for 24% of total Q4 PEP sales. Up 41% on 1997 and up 8% on Q3 1998
  

• OEIC funds under management reach £13.9 billion
  

Record sales for 1998
In an environment of a slowing economy, low retail sales and volatile markets, net unit trust sales of £596 million in December were 35% ahead of December 1997. The total for the whole year reached a record £8.6 billion. December’s net PEP sales of £368 million, also well ahead of 1997, took the 1998 net PEP total to a new high of £7.7 billion; while regular PEP plan sales for the last quarter of the year reached a significant 24% of the overall £1.9 billion PEP total for Q4. Nearly 2 million private investors saved a total of £1.6 billion in 1998.

The providers in 1998
Banks and building societies together with life companies increased net sales by 7% and 8% respectively compared to 1997. Net business flows through the banks and building societies reached a total of £2.5 billion from £2.3 billion, and represented 29% of the whole. The life companies sold a net £1.7 billion of investment funds compared to £1.5 billion, 19% of the retail total. Fund managers, on the other hand, increased their share of retail investment fund sales to over 50% of the industry retail whole. Their £4.5 billion of sales was 23% up on the previous year’s total of £3.6 billion.

The distributors in 1998
Intermediaries and tied agents increased their annual gross business flows in 1998 at similar rates. The 1998 total for IFAs, 45% of the whole of retail sales, reached £9.5 billion and was 28% up on l997; while the £6 billion total for company salesforces was 30% higher than 1997 and took their share of the whole to 29%. The rate of increase for total direct public sales slowed slightly to 18%, although their actual retail share remained at 19%. Direct sellers bought £4 billion of funds in 1998 compared to £3.3 billion in 1997. Institutions invested a net £3.7 billion in 1998, to match their totals for both 1995 and 1996.

Bonds
Bond funds crept up in popularity during 1998. Bond fund sales accounted for 27% of the total net retail sales in 1998, up from 23% the year before. The continued popularity of corporate bond PEPs, and especially renewed interest by independent intermediaries who sold 50% more corporate bond PEPs than last year, contributed to the rise.

Equities
UK Growth funds dominated equity fund sales during 1998 even more so than in 1997, with a net total for the year of well over £2 billion. Company salesforces were the key sellers. Growth and Income funds were next in terms of popularity, just as in 1997, with intermediaries making up for the slight drop in interest by the other distributors.

However, the most significant change from last year was a leap in European fund sales via both intermediaries and company salesforces. A record £2.8 billion in total poured into the Europe fund sector from retail sales during the year, 79% up on 1997. Intermediaries contributed the lion’s share of £2 billion, but company salesforces also more than doubled their 1997 total to £364 million.

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

"The popularity of investment funds, there are now more than two million regular savers, points to an ideal environment for the introduction of ISAs later in the year.

He continued,

" A significant feature of 1998 was that although the pattern of performance of the stock market was very different to 1997, the pattern of saving was almost identical. People are clearly saving for the long term and, correctly, are not panicked by short term fluctuations."

Regular Savings Plans: Q4 1998 (1^st October 1998 to 31^st December 1998)

Plan Holders:

Sales: £mn

Note: Figures represent totals for the quarter, not monthly totals within the quarter.

Summary table: December 1998 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
Clare Arber, PR Manager  AUTIF  0171 831 0898
Emma Weiss, Communications Manager  AUTIF  0171 831 0898
Michael Quach, Head of Statistics  AUTIF  0171 831 0898

Notes to Editors:

Best selling funds in December
Net Retail Sales                                        Net Institutional Sales
Other UK Fixed Interest, UK Growth      Other UK Fixed Interest, North America

Worst selling funds in December
Net Retail Sales                                        Net Institutional Sales
International Growth, Far East Incl Japan  International Growth, Far East Excl 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 - 1992 to 1998

2. Sector summary - December 1998

3. Retail gross - December 1998

4. Retail repurchases - December 1998

5. Retail net sales - December 1998

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

7. Unit trust net investment 1993-1998

8. Gross retail sales by distribution channel 1994-1998

9. Net retail sales by distribution channel 1994-1998

10. Gross retail sales by type of provider 1994-1998

11. Net retail sales by type of provider 1994-98

12. Net retail sales – Top 4 sectors

13. PEP net retail sales and FTSE100

Charts

Back to 1999 Press Release menu
Back to UK Business (monthly)