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Embargoed: 12.00pm: Monday 31 January 2000

1999 SEES RECORD RETAIL SALES FOR INVESTMENT FUNDS

• Net retail sales more than double - £14.3bn - up 66% on 1998
• Five-fold increase in net retail sales outside PEP/ISA wrapper
• Industry funds under management reach £254bn – up 39% on 1998
• Soaring technology funds continue to attract retail investors
• Modest increase in regular savings plans for the final quarter of 1999
• Gross sales of ISAs in December ’99 same as PEPs in ‘98

STATISTICS FOR THE MONTH OF DECEMBER

Although higher than December ’98, last month saw the traditional seasonal tail-off in unit trust and OEIC sales. At £3.4bn gross sales were down on November’s £4.7bn, but nevertheless up 28% on December 1998 (£2.6bn). Net retail sales in December 1999 of £1.1bn well exceeded the previous year’s £568mn.

Retail investors continued to pour money into technology funds, almost £254m, with IFAs providing the main driving force.

ISA funds under management rose 15% to £6.9bn, with the number of accounts reaching 2.7m. The distribution split remains similar to previous months with sales forces/tied agents accounting for 44% of the business, IFAs 38% and the direct channel, 17%.

Regular Savings Plans
The latest figures show an 8% increase in the number of plans started in the last quarter of 1999. As at the end of December there were over 1.6m plans. Disappointingly, this is still well below the two million plans that were in existence when PEPs came to a close.

STATISTICS FOR THE YEAR - 1999
Funds under management climbed 39% from £183bn to end the year at £254bn. Unitholder accounts passed 14 million. Total gross sales rose 16% to £45.6bn, compared to £39.2bn for 1998 and total net sales of £18bn were 44% up on the £12.5bn for 1998. Gross sales were split 37% (£17.1bn) institutional and 63% (£28.5bn) retail. Institutions accounted for 49% of all repurchases, and retail 51%.

Institutional Sales - 1999
Pension funds, unitised insurance investments (insurance products investing in unit trusts) and in-house insurance investments (life companies’ own funds) accounted for 22%, 11% and 4% respectively of total industry gross sales.

Retail Sales - 1999
As the chart shows, 35% (£15.5bn) of all unit trust/OEIC sales in 1999 was invested outside the tax-efficient wrapper of a PEP/ISA. 12% (£5.5bn) of investments were made through an ISA and 16% (£7.5bn) via a PEP (this includes transfer business). Net ISA sales were £5.4bn, net PEP sales were £3.1bn and net retail unit trust and OEIC sales outside a PEP or ISA were £5.8bn.

OEICS
OEICs accounted for nearly a quarter (23%) of all investment fund sales in 1999 (19.5% in 1998) and 18% of funds under management (8% in 1998). There are now 34 OEIC providers, offering 295 subfunds. This compares with 15 providers and 115 subfunds at the end of 1998.

Distribution
IFAs have increased their position as lead retail distributors of unit trusts and OEICS in 1999. The sales split across all distribution channels was; 48% IFAs, 27% sales forces/tied agents, 18% direct channel and 7% private client. Last year’s split was 45% IFA, 29% sales forces, direct 19% and private client 7%.

Market Share
‘Pure’ fund management businesses have taken a greater share of the market, with 60% of all retail net sales in 1999 (51% in 1998). As a result, bank/building society-owned companies and life company-owned businesses have lost out. Life companies saw 13% net sales business (down from 20% in 1998), whilst banks/building societies, whose market share reduced to 27% from 29%, nevertheless saw an increase in net sales of 56% to £3.9bn (£2.5bn in 1998). ‘Pure’ fund management companies saw net sales almost double in 1999 to £8.5bn from last year’s £4.4bn. Life company-owned businesses’ net sales grew by just 10% to £1.8bn from £1.7bn in 1998.

PEPs
PEP funds under management finished 1999 at £60.3bn (£49.4 in 1998). Total PEP sales for the year totalled £7.5bn, 73% of these were made before the new tax year.

Asset split
70% (£19.6bn) in gross retail sales went into equity funds in 1999, (19%) £5.5bn into bond funds, (9%) £2.6bn into equity & bond funds and (2%) £531mn into cash funds. The effect of redemptions on net retail sales gave a split of 62% (£8.7bn) in equity funds, (28%) £4bn into bond funds and (10%) £1.5bn into equity & bond funds.

Commenting on these statistics, Anne McMeehan, Director of Communications at AUTIF, said:

"Private investors have made a significant mark on the industry’s sales figures for 1999. The record number of PEP sales, the steady success of investment fund ISAs and the increasing popularity of unit trust investment outside the PEP and ISA wrappers, have combined to make 1999 the most successful year yet for the industry."

"This makes the drop in regular savings all the more disappointing. These plans offer one of the easiest ways to access the long term benefits of stockmarket investment, and are particularly relevant to younger and new investors."

Regular Savings Plans: Q4 1999 (1st October 1999 to 31st December 1999)

Plans:

Sales: £mn

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

Summary table: December Unit Trust, ISA and PEP sales

For further information please contact:

Anne McMeehan, Director of Communications, AUTIF, +44 (0)20 7831 0898
Michael Quach, Head of Statistics, AUTIF, +44 (0)20 7831 0898
Clare Arber, PR Manager, AUTIF, +44 (0)20 7831 0898

Notes to Editors:

Best selling funds in December 1999

Net Retail Sales
UK All Companies, Global Specialist

Net Institutional Sales
Japan, Europe Excl UK

Worst selling funds in December 1999

Net Retail Sales
UK Money Market, North American Specialist

Net Institutional Sales
Japanese Specialist, Europe Incl UK

Best selling funds in 1999

Net Retail Sales
UK All Companies, UK General Bonds

Net Institutional Sales
UK General Bonds, UK All Companies

Worst selling funds in 1999

Net Retail Sales
North American Specialist, UK Money Market

Net Institutional Sales
Europe Excl UK, European Specialist

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 - December 1999

3. Retail gross - December 1999

4. Retail repurchases - December 1999

5. Retail net sales - December 1999

6. Institutional business - gross, repurchases and net sales - Dec 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 – December 1999

8. ISA gross sales – December 1999

9. ISA repurchases – December 1999

10. ISA net sales – December 1999
    

Summary Sheet
Sector Summary
Retail Gross Sales
Retail Repurchases
Retail Net Sales
Institutional Sales
ISA Sales and Repurchases
ISA Gross Sales
ISA Repurchases
ISA Net Sales
Unit Trusts/OEICs Net Investment, 1995-1999 (PDF Format)
Gross Retail Sales By Distribution Channel, 1995-1999 (PDF Format)
Net Retail Sales by Distribution Channel, 1995-1999 (PDF Format)
Net Retail Sales - Top 4 Sectors in 1999 (PDF Format)
Gross Retail Sales by Type of Providers, 1995-1999 (PDF Format)
Retail Net Sales by Type of Providers, 1995-1999 (PDF Format)
ISA/PEP Gross Sales (AUTIF) (PDF Format)

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