For immediate release: Wednesday 8 February 2006

QUARTERLY INVESTMENT FUND STATISTICS
FUNDS OF FUNDS, TRACKER AND ETHICAL DATA – QUARTER 4 2005

• Total investment funds under management £347 billion

• Funds under management in funds of funds £23 billion
• Net retail sales of funds of funds £627 million

• Tracker funds under management £21 billion
• Net retail sales of tracker funds -£18 million
• Ethical funds under management £4 billion
• Net retail sales of ethical funds £29 million

Funds of Funds – funds under management
Funds under management at the end of quarter 4 reached £23 billion, up from £21 billion at the end of the previous quarter and an increase of 56% from the same quarter in 2004. Balanced managed funds accounted for the majority of funds under management, representing 70% of assets, followed by 18% in equities.

Funds of funds - sales
Total net sales were £1.1 billion in the fourth quarter of the year, up from £643 million in Q3, and almost three times higher than the £396 million seen in Q4 2004. The split between sales of internally invested and externally invested funds evened out in Q4 with those invested internally accounting for 48% of net sales, while those invested externally represented 52%.  The most popular sector in Q4 was Cautious Managed, accounting for £342 million of net business.  Of this, 79% was in externally invested funds. 

Tracker funds
Funds under management in Q4 2005 reached £21 billion, an increase of 5% from Q3 and 37% from the £16 billion in Q4 2004. Retail sales saw a net outflow in Q4 2005 of £18 million, following the outflow of £122 million in Q3; the same quarter the previous year saw an outflow of £70 million. The most popular channels for gross retail tracker sales in Q4 were the intermediary channel and direct sales, each accounting for 37% of sales.

Ethical funds
Ethical funds under management in Q4 2005 increased from the previous quarter and reached £4 billion, an increase of 18% on the same quarter in 2004.

Richard Saunders, Chief Executive of the IMA commented:

“2005 finished on a strong note, with net retail sales rising to levels not seen for 5 years.  Funds of funds continued to increase in popularity, though the previously very strong trend towards “unfettered” funds seemed to slow down in the final quarter.  Meanwhile, fund supermarkets are increasingly becoming a dominant channel for new sales.” 

-Ends-

Glossary

Detailed tables
1. Summary table
2. Quarterly gross retail sales by distribution channel
3. Quarterly net retail sales and net ISA/PEP sales vs FTSE 100
4. Quarterly net retail sales by asset type
5. Quarterly total net sales by client type
6. Comparative performance of £1,000 lump sum over 5, 10 and 15 years
7. Comparative performance of £50 per month savings plan over 5, 10 and 15 years
8. Summary of funds of funds unit trust/OEIC funds under management
9. Summary of funds of funds unit trust/OEIC sales
10. Funds of funds assets and sales by sector
11. Summary of tracker and ethical funds under management and sales
12. Performance of lump sum and savings plans by sector

For further information, please contact:
Helen Stephenson, Communications Officer, IMA,  020 7831 0898

Out of hours contact:
Mona Patel, Head of Communications, IMA, 07834 089332