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ISA withdrawals on the rise

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29/07/2008

Net sales of UK domiciled investment fund ISAs saw outflows of £209.9m in June, up from £198.3m in May, according to the Investment Management Association.

The most popular UK domiciled ISA sector in June was UK All Companies, accounting for 19% of gross ISA sales. In net terms, the most popular ISA sector was Cautious Managed.

Funds under management of UK domiciled investment funds were £425.2bn in June 2008, 6% lower than the previous month and 9% lower than June 2007.

UK domiciled ISA funds under management of £87.8bn were 6% down compared to the previous month and also compared to the same month the previous year.

There were £140m net retail sales, with the biggest net inflow into the ‘other’ category, driven by absolute return funds. Balanced funds had inflows of £126m while equity funds saw outflows of £371m.

Institutional holdings of unit trusts and OEICs saw overall outflows of £503m. This included a £658m outflow from money market funds and a £450m inflow into bond funds.

The most popular sector in June 2008 was UK All Companies, representing 16% of gross retail sales of UK domiciled funds.

The most popular distribution channel for gross retail sales of UK domiciled funds in June 2008 was the intermediary channel, at 85%.

Gross ISA sales of £313m from fund supermarkets made them the dominant distribution channel for ISAs, followed by £245m through sales force/tied agents.

The Absolute Return sector was the most popular UK domiciled net retail sector with inflows of £214m. Property funds saw net retail outflows of £14m.

The sector with the biggest net retail outflows in June 2008 was the UK All Companies sector with a net outflow of £164.7m.

Overseas funds under management of £16.2bn in June 2008 saw a 6% decrease from the previous month, while overseas ISA assets of £304m fell 13% from May 2008. Net retail sales of overseas domiciled funds in June 2008 saw outflows of £164.7m.

Net retail sales of overseas domiciled investment fund ISAs saw outflows of £1.9m in June 2008, compared to outflows of £100,000 in May 2008.

Richard Saunders, chief executive of the IMA, said: “Net retail sales of both onshore and offshore funds returned in June to the subdued levels of earlier in the year.

“The exception was the new absolute return sector, which saw inflows of over £200m and now stands above £2bn. Taken with the continued outflows from equity funds, this clearly demonstrates the limited risk appetite of investors at the moment.”

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