October sees investors dumping Isa’s

According to figures from the Investment Management Association (IMA), the fund management trade body, October saw more investors dumping Isa’s as opposed to buying them.

Anna Bowes of AWD Chase de Vere, the independent financial adviser, said stock market jitters, as a result of the credit squeeze, are sending people into a panic. Isa’s have been around for nearly a decade and those who have been saving have decided that now is the time withdraw their money.

Last month, Isa sales suffered a net outflow of over £31 million, the highest since their launch in 1999. Net Isa sales, a month earlier in September totalled £43.2 million compared £83.4 million a year ago.

Furthermore, net sales of retail funds overall declined to £875 million last month, down from £887.6 million in September. However, sales totalled £1.6 billion 12 months earlier.

Property funds have been extremely popular with private investors over the last few months but last month, they saw net outflows of £48 million. The commercial property investment class has been affected badly following a slump in the sector.

Fund management group, M&G Investments, announced last week it was putting in place a 90-day notice period on institutional investors wishing to exit its UK real estate funds due to ongoing net redemptions.

Furthermore, Schroders, another investment house, cut the price of units in its flagship institutional UK property fund by an eighth to reflect falling commercial property values.

Richard Saunders of the IMA said overall net retail sales continued to hold up well in spite of the recent market turmoil with equities remaining the most popular asset class for retail investors.

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