• Investment funds under management £236 billion

• Gross industry sales £3.6 billion (December 2000 £4.1 billion)

• Gross retail sales £1.8 billion (December 2000 £2.2 billion)

• Gross ISA sales £327 million (December 2000 £548 million)

• Gross industry sales in 2001 - £51.1 billion (2000 - £56.9 billion)

• Gross retail sales in 2001 - £28.7 billion (2000 - £36.6 billion)

• Gross ISA sales in 2001 - £8 billion (2000 £11.7 billion)

December 2001

Investment fund sales ended the year on a steady note.  Although business overall in December was, as usual, quieter than in November, net retail sales rose to £629 million, an increase of 11% (£569 million in Nov).  Total net sales were affected by one member company which made an institutional repurchase of over £1 billion, producing a negative net sales figure of £216 million.  Funds under management remained steady at £236 billion.

Regular savings

The number of regular savings plans, both in and outside an ISA, fell for the second successive quarter to bring the total number of schemes in use to just over 2 million, a marginal increase on the same period last year.  £520 million was invested through regular savings plans during the three months ended December 2001 (£443 million through ISAs), 7% below the same period last year.

Clare Arber, Head of Communications at AUTIF, commented:

“After the impact of September 11, the year ended on an encouraging note, with net retail investment increasing over the last quarter.  However, it is not surprising that sales declined overall during 2001.  The uncertainty caused by world events and, in particular, lower market values, kept many potential savers away.  On the other hand, existing investors did not panic and sell, but stayed calm and remained invested.”

January – December 2001

Industry funds under management stood at £236 billion, compared with £261 billion at the beginning of the year, reflecting the fall in stockmarkets worldwide.  Sales of investment funds fell for the first time since 1995.  Annual gross sales (new investment and transfers into a sector) of £51 billion were down by 10% from £56.9 billion in 2000.  

Net industry sales of £12 billion in 2001 were down by a third on the previous year (£18.1 billion).  Private investors continued to be responsible for the larger proportion of unit trust and OEIC investment, accounting for 77% (£9.3 billion) of net sales, whilst the institutional players took 23% (£2.8 billion).  The split was less pronounced than last year, when net sales were split 98% retail and 2% institutional.

Repurchases (transfers out of one sector or encashments) of £39.1 billion were at a similar level to the previous year’s £38.8 billion.  Institutions accounted for 50.4% of all repurchases and retail investors 49.6%.

Institutional sales

Institutional gross sales of £22 billion increased by 11% on the previous year.  Repurchases fell marginally to £19.7 billion from £19.9 billion in 2000.  

Investment through ‘pension funds’ (mainly individual company pension schemes) accounted for 23% of total industry gross sales in 2001.  ‘Unitised insurance’ (insurance company products invested in unit trusts/OEICs) made up 13% and ‘in-house insurance’ investments (life companies’ own funds) 7%.   In 2002 these were 20%, 12% and 3% respectively.

Retail sales

Gross retail sales of £28.7 billion were a 22% drop on the previous year’s £36.6 billion.  ISAs contributed £8 billion to this figure, 16% of total industry sales, whilst PEP transfers of £1.7 billion made up 3% of total sales.  Almost £19 billion, 37% of total sales, were made outside the tax-free wrapper.  (A small percentage of this figure will be ISA sales made through fund supermarkets.)

Net retail sales for 2001 of £9.3 billion were down by almost half of those for the previous year, whilst net ISA sales fell by 39% to £6.7 billion.

OEICs

There are 58 OEIC providers (some of which also manage unit trusts) offering 629 sub funds.  OEICs now represent 32% of total investment funds by number and 35% of all industry funds under management.  In 2000 OEICs accounted for 27% of funds under management (18% in 1999 and 8% in 1998).

Distribution

IFAs have maintained their position as the main distribution channel for investment funds, with 64% of gross retail sales.  Sales forces and tied agents accounted for 16% of retail business, whilst the ‘direct’ channel was responsible for 14% and private clients, 6%.   However, as can be seen in the table below, ISA distribution is spread more evenly amongst the three largest distribution channels.

PEPs

PEP funds under management stood at £46.5 billion, compared with £56.8 billion at the start of the year.  Almost £4.3 billion was repurchased from PEP investments during 2001, of which £1.7 billion was reinvested into PEPs. 

Asset split

Equity fund sectors saw their share of gross retail sales slow to 71% in 2001 from 81% in 2000.  Bond funds increased to 19% from 12% in the previous year.    Managed funds and cash funds also increased their share of sales.

Regular Savings Plans: Q4 2001 (1^st October 2001 to 31^st December 2001)

Sales: million

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