Lower Isa sales continue for 2007 - IMA

Isa sales for 2007 continue to be lower than 2006, according to figures from the IMA. Richard Sa...

Isa sales for 2007 continue to be lower than 2006, according to figures from the IMA.

Richard Saunders, chief executive of the IMA, said lower Isa sales in February have signalled a modest start to the Isa season.

However, he hoped last week’s Budget announcement that contribution limits are to increase, together with the overhaul of the system, would restore Isa confidence.

Net Isa sales of £88m in February were almost three times higher than those seen in January but were down 40% from February 2006. The most popular Isa sector in February was UK All Companies, accounting for 25% of gross Isa sales.

Total net sales were £973m with equities accounting for inflows of £806m. Of the £973m net retail sales, £761m was invested in equities, followed by £168m in balanced funds.

The most popular sector in February was UK All Companies, representing 18% of gross retail sales. The sector was favoured by intermediaries and accounted for 17% of gross retail business through this channel. The most popular distribution channel in February was intermediaries, representing 81% of gross retail business.

Gross Isa sales of £279m from fund supermarkets made them the dominant distributor of Isas, followed by £200m of sales through sales force/tied agents. The Specialist sector remained the most popular net retail sector in February with inflows of £384m, of which £408m was in property funds.

The sector with the biggest outflows in February was UK Corporate Bond with net outflows of £203m. Investment funds under management of £448bn in February saw a rise of less than one percentage point from January but were 21% higher than February 2006.

Isa funds under management of £52bn also rose less than one percentage point but were 10% higher than during the same period last year.