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Supermarts take 22% of March&#39s £1bn Isa business

Sales of unit trust and Oeic Isas dropped by 24 per cent in March compared with last year despite sales reaching almost £1bn as investors clamoured to take advantage of their allowances.

Figures from the IMA show that sales rocketed by 87 per cent to £992m in March from £531m in February, bringing total gross sales of investment fund Isas for the 2001/02 tax year to £6.9bn.

However, compared with last year – when total sales hit £9.9bn – business was down by 30 per cent, with sales in March failing to match 2001&#39s level of £1.3bn. Between April 1 and April 5, sales reached £420m but again were overshadowed by the same period last year, when £664m of Isas were sold.

Despite declining sales, some distribution channels fared well during the Isa season. The IMA found that around 22 per cent of sales were through fund supermarkets, which sold £215m of Isas in March compared with £80m and about 15 per cent of the market in February.

However, IFAs remained the dominant channel, with more than 42 per cent of Isas sold through IFAs compared with 25 per cent for salesforces and direct agents.

The most popular funds were those in the corporate bond and equity income sectors, where sales were higher in March than last year and in February.

Head of communications Clare Arber says: “It is encouraging to see that levels of investment by private individuals continues to rise.

“Some buyers chose to make the most of their Isa allowance but others seem to have used the end of the tax year as a prompt to make further use for their longterm savings.”

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