New Star, one of the industry's most high-profile groups, is reporting sluggish retail sales for the year so far, fuelling fears that the Isa season could be another damp squib.
The firm, which accounts for 8 per cent of net retail fund sales, says its overall fund flows are buoyant but admits that sales through private investors are depressed, giving weight to fears that the Isa season will mirror the poor season last year. If it does, some fund groups believe this year could be the last Isa season in the traditional sense as firms increasingly seek to emphasise the importance of year-round investing.
New Star says the inflows it is attracting are trickling into cautious funds such as its distribution fund and its multimanager offering, New Star Portfolio. But marketing director Rob Page, who argues that there are currently sound macro reasons for investors to return to markets, says the group's mainstream funds, which it has marketed heavily, are still not attracting significant sums of money.
However, Page believes that inflows will pick up as the tax deadline looms, which he says should result in a small Isa season driven by sales in specialist areas.
He says: “We believe fund flows this season are going to come in very late. Mainstream equity funds are not taking off. There are very good macro reasons to invest and overall sales are buoyant but the man-on-the-street sales – the retail sales – are still slow.”
Gartmore head of UK retail Paul Feeney says: “The houses have had to come away from the Isa season because of low demand. Everyone talks about it but it is becoming less relevant. This may be the last time we see an Isa season.”