Net sales of retail investment funds fell sharply in 2002, with sales in December plunging by £230m, according to the IMA.
The IMA's yearly figures show that new retail fund sales fell to £7.6bn last year from £9.3bn in 2001, with December sales plummeting to £269.3m compared with £606.5m in December 2001 and £499.5m in November.
Last year's total is the lowest since 1997's figure of £7.4bn New Isa sales last year almost halved compared with 2001, slumping to £3.85bn from £6.67bn. However, Isa sales in December held up, falling slightly to £178m from £186m in November and £264.8m in December 2001.
The best-selling funds last year were in the UK corporate bond sector, with net retail sales hitting £2.59bn.
The second most popular sector was UK equity income with sales of £1.44bn.
Worst were the UK equity & bond income and the UK smaller companies sectors, which suffered negative sales of £194m and £149m respectively.
Head of communications Clare Arber says: “People are still investing but they are investing less. However, they are still showing a marked preference for bond funds, with the corporate bond fund sector attracting over a quarter of all retail sales in December.”
Michael Philips proprietor Michael Both says: “Unless fund managers can persuade investors they are a safe pair of hands and actually add value, they will not turn this situation around.”