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Investment fund Isa sales slump by £400m in March

Gross retail sales of investment fund Isas plunged by more than £400m in March from the same time last year, according to the Investment Management Association.

The IMA&#39s monthly statistics reveal that retail Isa sales slid to £576m in March, up from £378m in February but down on the £992m in sales reached in March 2002.

At £5.8bn, gross Isa sales for the 2002/2003 tax year were more than £1bn down on the £6.9bn achieved in 2001/2002.

The slump also hit overall gross retail sales of investment funds, which fell to £2.4bn from £3bn in March 2002. However, sales were stronger than in February, when they stood at £1.7bn.

The percentage of Isas sold by intermediaries increased slightly in March to 28 per cent from 26 per cent while salesforces/tied agents saw their market share fall to 47 per cent from 50 per cent.

Direct sales jumped to 24 per cent from 18 per cent while private-client stockbrokers suffered a drop to 1 per cent from 6 per cent.

The top-selling retail sector for the second successive month was the UK corporate bond sector followed by the all companies sector.

Head of communications Clare Arber says: “As in previous years, Isa sales have picked up at the end of the tax year but expectations of only a very modest season have proved well founded.

“Investors continue to be wary of the stockmarket although a number have decided it is a good time for them to buy.”

Plan Invest joint managing director Mike Owen says: “In the circumstances, there is still a decent slug of money going into Isas but a lot of one-off investors have shunned them. The Government&#39s scrapping of the Isa tax credit will not help this.”

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