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IMA in tax plea as fund sales suffer

Net retail sales of investment funds in February plummeted by almost £500m from the same time last year, according to the Investment Management Association.

The IMA&#39s monthly statistics reveal that retail sales slid to £194m in February, down from £222.5m in January and £670m in February 2002. At £193m, Isa sales were also down on last February&#39s figure of £319m but showed a rise on the £158m achieved in January.

The percentage of Isas sold by intermediaries fell slightly to 26 per cent from 28 per cent in January, with salesforces/tied agents accounting for 50 per cent and the direct channel 18 per cent. Private client stockbrokers made up the remaining 6 per cent.

The UK corporate bond sector continued to dominate retail investment, accounting for £347m of retail sales. The UK equity income sector was second, with £56m of sales. The least popular were the Europe exc UK and North America sectors, with redemptions cancelling out sales to the tune of -£77m and -£52m respectively.

The IMA says the sales slump demonstrates how much the industry needs the Treasury to review its decision to scrap the tax credit on equity Isas.

Head of communications Clare Arber says: “It is too soon to predict how this year&#39s Isa season will turn out but these sales figures reinforce our message to the Government – that now is exactly the wrong time to take away the tax credit on equity Isas.”


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