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Embargoed: 12.00 noon: Tuesday 30 January 2001

ROCKY MARKETS FAIL TO DETER INVESTORS

• Investment funds under management reached £261billion at the year end
• 65% of total sales were to retail investors
• 41% of total sales were to retail investors outside a PEP/ISA wrapper
• Regular savings plans reach record sales levels
• 50 OEIC providers with 475 sub funds accounted for 33% of total sales

Anne McMeehan, Director of Communications at AUTIF, commented:

"For the first time in 2000, investors in more broadly diversified funds have seen their patience rewarded.

"The excessive hype surrounding the whole technology phenomenon earlier in the year ground to a halt once the market watched some pretty spectacular falls in previously favoured stocks. But on the whole retail fund investors adopted a far more sanguine approach, including those who perhaps had committed themselves to more specialist investment sectors."

DECEMBER 2000 FIGURES
Sales of investment funds traditionally slow down in December and 2000 was no different. Gross sales of £4.1billion were down on November’s £4.5billion but up 21% on December 1999 (£3.4billion). Net retail sales of £988million were lower than both the previous month (£1.1billion) and year (£1.1billion also).

ISA sales of £548million were lower than both the previous month and year (£669million and £603million respectively). ISA funds under management passed £18billion and over 5.5million investment fund ISA accounts have now been opened.

The Specialist Sector is still in the top five sectors for retail investors, with 7% of all net sales.

Regular Savings Plans
For the second quarter running, regular savings plans enjoyed record investment levels. Sales of some £560million were made during the three months ending December 2000, with ISA monthly savings plans accounting for £459million. The number of plans has also exceeded its pre-ISA level; over two million monthly savings plans have now been opened.

JANUARY – DECEMBER 2000 FIGURES
Industry funds under management finished the year at £261billion, up 3% from £254billion at end December 1999. Total gross sales increased by 25% to £57.2billion for the year (£45.6billion in 1999). These were split 65% (£37billion) retail and 35% (£20.2billion) institutional. Total net sales of £18.3billion - a slight increase on 1999’s £18billion - were split 98% (£17.9billion) retail and 2% (£320million) institutional.

Repurchases increased to £39billion, 41% up on the previous year. Institutions accounted for 51% of all repurchases and retail investors, 49%.

Unitholder accounts increased by almost 2.5million to 16.5million.

Institutional sales
Pension funds (not invested through a life company), unitised insurance (insurance company products invested in unit trusts/OEICs) and in-house insurance investments (life companies’ own funds) accounted for 20%, 12% and 3% of total industry gross sales respectively.

Retail sales
Total retail sales amounted to £37billion for the year. But, as shown in the chart above, the 41% (£23.4billion) of total unit trust/OEIC sales was invested by private individuals outside an ISA or PEP. A major increase in non-ISA/PEP retail investment fund sales first became apparent in 1999, when 35% of total sales were invested outside a tax-free wrapper.

ISAs made up 20% (£11.6billion) and PEP transfers 4% (£2.4billion) of total industry gross sales. Net ISA sales were £10.9billion and retail investment fund sales outside an ISA were £7.1billion.

OEICs
There are now fifty OEIC providers (some of which also manage unit trusts) offering 475 sub funds, which represent 25% of total investment funds by number. Sales of OEIC funds accounted for 33% of total investment fund sales in 2000 (23% in 1999 and 19.5% in 1998). OEIC funds under management reached £71.7billion at the end of December and account for 28% of all industry funds under management (18% in 1999 and 8% in 1998).

Distribution
IFAs have confirmed their position as the major source of retail fund business, with 61% of total retail sales. The other distribution channels were split; 20% sales forces and tied agents, 14% direct, 5% private client. Corresponding figures for 1999 were: IFAs 48%; sales forces/tied agents 27%; direct 18%; private client 7%.

ISA distribution was split as follows; 43% IFAs, 35% sales forces/tied agents, 22% direct, 1% private client.

Market share
‘Pure’ fund management companies have increased their share of net retail sales to 72% (60% in 1999 and 51% in 1998). Life company-owned businesses accounted for 16% (13% in 1999 and 20% in 1998), whilst the banks/building societies’ share decreased to 12% (27% in 1999 and 29% in 1998). The number of corporate reorganisations in 2000 will inevitably have had an impact on market share.

So-called ‘pure’ fund managers enjoyed a 51% increase in net sales rising from £8.5billion in 1999 to £12.9billion in 2000. Life company business also enjoyed an increase in net sales, of 56% to £2.9billion (£1.8billion) but bank/building society net sales reduced by 44% to £2.2billion (£3.9bn).

PEPs
At the end of December 2000, PEP funds under management stood at £56.8billion. Of the £5.6billion of PEP repurchases, £2.4billion was reinvested into PEPs.

Asset split 81% (£30billion) of gross retail sales went into equity funds in 2000, 12% (£4.3billion) into bond funds, 5% (£1.9billion) into equity & bond funds and 1% (£478million) into cash funds.

Regular Savings Plans: Q4 2000 (1 October 2000 to 31 December 2000)

Sales:

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

Summary table: Dec - Unit Trust, ISA and PEP data

For further information please contact:

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

Notes to Editors:

Best selling funds in December 2000

Worst selling funds in December 2000

Summary Sheet
Sector Summary
Retail Gross Sales
Retail Repurchases
Retail Net Sales
Institutional Sales
PEP Summary
Unit Trusts/OEICS Net Investment, 1995-2000 (PDF Format)
Gross Retail Sales by Distribution Channel, 1995-2000 (PDF Format)
Net Retail Sales by Distribution Channel, 1995-2000 (PDF Format)
Net Retail Sales - Top 4 Sectors in 2000 (PDF Format)
Gross Retail Sales by Type of Providers, 1995-2000 (PDF Format)
Net Retail Sales by Type of Providers, 1995-2000 (PDF Format)

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