Investment Fund Statistics December - IMA Press Release 2002

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For Immediate Release: Wednesday 29 January 2003

INVESTMENT FUND STATISTICS

DECEMBER 2002

Investment funds under management £195 billion
Gross industry sales £3.3 billion (December 2001 £3.6 billion)
Gross retail sales £1.7 billion (December 2001 £1.8 billion)
Gross ISA sales £327 million (December 2001 £333 million)
2002 Gross industry sales £47.6 billion (2001 - £51 billion)
2002 Gross retail sales £28.3 billion (2001 - £28.7 billion)
2002 Gross ISA sales £6.5 billion (2001 £8 billion)

December 2002

Total industry net sales of investment funds were £584 million in December. Retail net sales accounted for £269 million, which compares with £499.5 million in November 2002 and £606.5 million in December 2001. ISA net sales were £211.3 million, down from £224 million in November 2002 and £264.8 million in December 2001.

Corporate bond funds attracted 25% of retail business, followed by the UK All Companies which took 20% of sales and North America, with 9%.

2002 Summary

Funds under management ended the year at £195 billion, compared with £236 billion at the start of 2002. Annual sales slowed for the second year running, after reaching their peak in 2000. Net investment by retail investors was £8.3 billion, 11% below 2001’s £9.3 billion. Net sales of ISAs fell to £4.8 billion from £6.7 billion in 2001, a fall of about 28%.

Clare Arber, Head of Communications, of the IMA, commented:

“In the circumstances of last year it is not surprising to have seen a further fall in net investment by retail savers. Unlike many other countries in Europe and North America, however, UK savers are continuing to invest, albeit at reduced levels. It is notable too that they are showing a strong preference for bond funds.

“While none of us knows when the markets will turn, the lack of panic selling by retail investors continues to be encouraging.”

Institutional sales 2002

Institutional business of £19.3 bn (£22.5bn in 2001) accounted for 41% of total gross sales. Repurchases of £19.6 bn remained at similar levels to those of 2001 (£19.9 bn). Institutions were net sellers of funds over the year to the tune of £329 million.

Retail sales 2002

Gross retail sales of £28.3 bn were only marginally down on last year’s £28.7 bn. However, gross ISA sales of £6.5 bn were 19% below 2001 (£8 bn). Just under three quarters of all retail sales were made outside the PEP or ISA wrappers.

Retail repurchases, at £20 billion, were 3% higher than in 2001 (£19.4 billion).

ISA sales through fund supermarkets were £1.1 bn gross and £1 bn net.

The UK Corporate Bond sector was the top selling retail sector in net terms, with over £2.6 billion invested over the year. UK Equity Income funds and UK All Companies funds attracted £1.4 bn and £1.2 bn respectively. The UK Other Bond sector saw sales of £867 million, with Balanced Managed funds at £463 million.

OEICs

There are 71 management companies providing 931 OEIC subfunds, compared to 58 providers offering 629 subfunds a year ago. They represent over half (53%) of all funds under management (35% in 2001) and 48% of total investment funds by number (32% in 2001).

Distribution

2002 saw very similar retail distribution patterns to previous years, with a slight shift from the Direct channel to Intermediaries.

Distribution	2002 %	2001%	2000 %	ISAs 2002 %*	ISAs 2001 %	ISAs 2000 %
Intermeds	66	64	61	36	39	43
SF/TA	17	16	20	38	36	35
Direct	11	14	14	25	24	22
Private client	5	6	5	0	1	1

PEPs

PEP funds under management stand at £35 bn, with over 7.5 million PEP accounts still invested. Over £3.5 bn was repurchased from PEPs over the year, of which £1.2 bn was transferred to other sectors.

Asset Split

Bond funds increased their share of gross retail sales to 24% from 19% in 2001 and 12% in 2000. Equity funds saw their share shrink further to 66% from 71% in 2001 and 79% in 2000. Managed funds accounted for 6% and cash funds 2%.

Regular Savings Plans: Q4 2002 (1^st October 2002 to 31^st December 2002)

Investment in regular savings schemes has fallen for the seventh successive quarter. Contributions for the past three months slowed to £486 million, with the number of plans falling by 4,620.

	*Q1 1999*	*Q2 1999*	*Q3 1999*	*Q4 1999*	*Q1 2000*	*Q2 2000*	*Q3 2000*	*Q4 2000*
*PEP/ISA*	1,759,588	1,342,113	1,165,696	1,340,003	1,408,040	1,508,137	1,593,089	1,657,533
Non PEP/ISA	256,867	298,615	321,891	274,382	294,794	357,795	366,294	362,485
Total	2,016,455	1,640,728	1,487,587	1,614,385	1,702,834	1,865,932	1,959,383	2,020,018

	*Q1 2001*	*Q2 2001*	*Q3 2001*	*Q4 2001*	*Q1 2002*	Q2 2002	*Q3 2002*	*Q4 2002*
*PEP/ISA*	1,711,011	1,761,793	1,736,393	1,656,675	1,657,111	1,635,854	1,560,550	1,554,130
Non-PEP/ISA	319,893	319,365	311,045	331,663	336,886	357,344	335,313	337,113
Total	2,030,904	2,081,158	2,047,438	1,988,338	1,993,997	1,993,998	1,895,863	1,891,243

Sales: £mn

	Q1 1999	*Q2 1999*	*Q3 1999*	*Q4 1999*	*Q1 2000*	*Q2 2000*	*Q3 2000*	*Q4 2000*
PEP/ISA	£431.0m	£243.6m	£321.3m	£351.3m	£386.3m	£421.2m	£448.0m	£459.4m
Non-PEP/ISA	£84.3m	£70.6m	£60.4m	£54.8m	£60.1m	£79.5m	£68.1m	£99.4m
Total	£515.3m	£314.2m	£381.7m	£406.2m	£446.4m	£500.7m	£516.2m	£558.9m

	*Q1 2001*	*Q2 2001*	*Q3 2001*	*Q4 2001*	*Q1 2002*	*Q2 2002*	*Q3 2002*	*Q4 2002*
PEP/ISA	£501.0m	£478.6m	£475.9m	£468.5m	£460.6m	£440.9m	£419.7 m	£414.2 m
Non-PEP/ISA	£76.6m	£78.7m	£71.8m	£72.3m	£71.3m	£71.1m	£76.4 m	£72.0 m
Total	£577.5m	£557.2m	£547.8m	£540.8m	£531.9m	£512.0m	£496.1 m	£486.1 m

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

Summary table: December – Unit Trust, ISA and PEP data

	Dec-02	Nov-02	Dec-01
Total funds under management	£194.7 bn	£203.2 bn	£235.8 bn
ISA funds	£22.7 bn	£23.3 bn	£21.6 bn
PEP funds	£35.2 bn	£36.7 bn	£46.5 bn
OEIC funds	£104.1 bn	£108.2 bn	£81.6 bn
Total gross sales