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Embargoed: 12.00pm:   Monday 28 June 1999

50% INCREASE IN NUMBER OF INDIVIDUAL SAVINGS ACCOUNTS (ISAs)

• The number of ISA accounts managed by the investment funds industry rose from 670,564 to 995,948 in May

• Gross ISA sales for May £513 million (April £556 million)

• ISA funds under management exceed £1 billion

• Total industry funds under management at the end of May 1999
  £205 billion (April 1999 £210 billion)

At such an early stage in the development of the ISA market it is premature to make assumptions and reach too many conclusions about buying patterns that may well alter in the coming months. However, gross sales of ISAs in May were down on April figures by 8%, but this is scarcely surprising in view of the tax year end surge of marketing activity. As previously predicted, although the majority of sales continues to be via sales forces and tied agents, the proportion sold via independent financial advisers has much increased (16% in April compared to 34% in May). Direct sales remain constant, comprising 16% of the total.

The small decline in PEP funds under management is to be expected. This is in part due to stock market slippage, in part natural wastage. This is a phenomenon likely to be repeated in future months. From now on all PEP "sales" are in fact "transfers" and in May stood at £217.4 million.

Anne McMeehan, Director of Communications at AUTIF said:

"Whilst it’s good to see some positive news reflected in this month’s figures, what is worrying is the slump in ISA sales when compared to the PEP numbers for the same period last year. (May 1998 PEP gross sales £971.7 million, May 1999 ISA gross sales £513.4 million.)

"A 47% decline in savings levels is of concern to the industry, but more importantly, it’s a signal that the Government cannot afford to ignore. ISAs need to be made more attractive – and the easiest way to achieve this is to make them simpler."

Summary table:  May Unit Trust, ISA and PEP sales

For further information please contact:

Anne McMeehan, Director of Communications, AUTIF, 0171 831 0898
Michael Quach, Head of Statistics, AUTIF, 0171 831 0898
Clare Arber, PR Manager, AUTIF, 0171 831 0898

Notes to Editors:

Best selling funds in May

Net Retail Sales
UK General Bonds, UK All Companies

Net Institutional Sales
UK All Companies, UK General Bonds

Worst selling funds in May

Net Retail Sales
Global Specialist, UK Equity Income

Net Institutional Sales
UK Money Market, Global 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/Oeic and PEP sales - 1992 to 1999

2. Sector summary - May 1999

3. Retail gross - May 1999

4. Retail repurchases - May 1999

5. Retail net sales -May 1999

6. Institutional business - gross, repurchases and net sales - May 1999

ISAs:
The ISA tables relate to accounts operated by unit trust managers only and not to accounts operated by all ISA managers.

7. ISA sales and repurchases – May 1999

8. ISA gross sales – May 1999

9. ISA repurchases – May 1999

10. ISA net sales – May 1999
    

Charts

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