Isa sales plummet by 60%
Net sales of Isas through fund managers and platforms fell heavily in the past Isa season, from £756m to £325m, despite the increase in the allowance, Daniel Godfrey has revealed.
The Investment Association chief executive said: “Net retail sales this March were well down in comparison with a year ago following the pattern seen in January and February. However, we did see record net retail sales of £938m into tracker funds.”
Figures from the fund managers and five platforms that provide the IA with data – Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual and Transact – revealed a fall in Isa sales from £822m in the 2013/14 tax year to £585m in the 2014/15 tax year.
The figures showed that in the final week of the last tax year net retail sales were £171m, down from £358m in the previous tax year.
Property remained the best-selling asset class in March, with net retail sales of £294m, compared with £304m in February, while inflows into mixed asset funds rose to £194m in March from £137m the previous month.
Jason Hollands, managing director of business development at Tilney Bestinvest, said: “Where investors have committed to Isas, income-generating sectors such as equity income and property funds have led the popularity tables – hardly a great surprise when interest rates and bond yields remain so low.”
UK equity funds have seen the largest ever net retail outflow for the period, with a record £963m. There were also record net retail sales of £663m into European equity funds.
Global equity funds were the second best-selling sector, with net retail sales of £264m, though down from £408m in February, and US equity funds were the third best-selling sector with net retail sales of £117m.
Tracker funds saw record net retail sales of £938m, with funds under management of £100.9bn as at the end of March, and platforms continued to see the highest-grossing retail sales at £8.7bn, according to the Investment Association.
Adviser View
Philip Bailey, a partner at Hertfordshire-based AssetFirst Investment Management, said: “I am not sure a financial adviser would or should build a portfolio based purely on what regions are doing well.
“It seems [based on the IA figures] that people are jumping on the bandwagon of what is currently performing well. UK equities should take a large slice, but for a diverse and balanced portfolio you should have all components.”
