Isa sales leap 18% as retail investors' confidence returns

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The Independent Online

Investor confidence in the stockmarket is starting to recover, as October sales figures for Isas show an increase of 18 per cent on sales in September, when sales hit an all-time low.

Investor confidence in the stockmarket is starting to recover, as October sales figures for Isas show an increase of 18 per cent on sales in September, when sales hit an all-time low.

Net Isa sales rose to £238m in October, according to monthly statistics from the Investment Managers' Association. Net sales of investment funds across the board, which discount the number of investors who cash in their funds, leapt to £620m compared with September's £148m, although down on last October's £788m.

Financial advisers said market stability was encouraging investors, but confidence was still taking time to recover. "Investors have seen the market stabilise after going below 4,000 [points]. Not many are coming to buy, but the panic decisions to sell are on the wane," said Patrick Connolly, at the independent financial advisers Chartwell. Investors cashed in £146m of their Isa holdings in October, compared with £172m in September.

With fewer encashments, net retail sales of investment funds reached £453m, a 75 per cent increase on October last year and more than four times last month's £110m. While private investors appear to be taking heart, professional fund managers are still cautious over the prospect for equity markets over the coming year.

Leigh Harrison, a UK equities fund manager at Credit Suisse Asset Management, says there are still too many negative conditions in the economy – such as high levels of mortgage borrowings and rising unemployment – to push the stockmarket to much higher levels in the short term. "Equities will continue to be volatile and the market will continue to track sideways. In 12 months' time we could still be at 4,200, but we may have been at 4,500 and 3,700 in between times. There won't be any clear trends either way," he said.

Total funds under management rose to £197bn in October, from £189bn in September, and the amount of funds managed in Isas was £22bn. Total gross sales of investment funds, which include those that are redeemed, were up to £4.1bn from £3.5bn in September.

Investing in UK corporate bonds was the most popular option for private investors, accounting for 21 per cent of all retail sales.

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