With-profits out of favour

Investment by AVC members in the asset class down from 60% in 2002 to just 36% this year

Contributions to with-profits funds by AVC members have fallen 40% over the past year, according to the latest annual Hewitt Bacon & Woodrow AVC survey. Last year's survey showed 60% of members choosing with-profits funds, 31% in unit-linked portfolios and 9% selecting cash. The 2003 survey found the number of investors choosing cash has risen dramatically to 20%, with 24% choosing managed funds, 5% selecting fixed interest portfolios and 15% choosing equity funds. This came at the expense of with-profits funds, which took 36% of new money invested. The mutation of with-profits funds,...