Figures from the Unit Trust Association indicate that investors are not yet plunging whole- heartedly into equities, however. The trusts that have been attracting the most money recently are money market cash funds, similar to bank and building society accounts, gilt and fixed-interest funds and those investing in international fixed-interest securities.
The UTA's statistics also show the number of individual unit trust holdings fell to a post-crash low of 4.36 million last month, continuing a trend of steady decline since the 1987 peak of over 5 million.
Gavin Grant, the UTA's director of public affairs, argues that the figure for unit-holder accounts may present an inaccurate picture of the extent of unit trust ownership. He says the UTA has realised that companies are not measuring their unit trust holdings on a uniform basis. The figure is meant to show the number of individual unit trust accounts. One individual may have several accounts and it is generally thought that the number of individuals with money in unit trusts is in the region of 1.5 million.
He says there is anecdotal evidence to suggest that, in the past few months especially, companies have been selling units to people who have not ventured into this form of investment before.
Mr Grant adds that there is a clear trend for savers to seek from unit trusts better returns than they can achieve from keeping money on deposit. 'With dividend yields on the FT-SE running at 4.5 per cent and further interest rate cuts in prospect, 1993 looks to be a very promising year for the unit trust industry.'
Total gross sales of unit trusts last month were pounds 981m. The net inflow, after encashments, was pounds 258m, the highest figure since September 1991.
In November, gross sales of international fixed-interest units were pounds 83m. Money market funds sold pounds 59m of units and UK gilt funds attracted pounds 29m of new money. In the 11 months to end- November these classes of trust sold pounds 820m of units. Net sales in November were pounds 121m and pounds 340m in the year to date. These figures represented half total unit trust net sales over the same periods.
Among equity funds, sales of Far East-invested trusts, excluding Japan, were brisk last month at a net pounds 107m. Most fund managers are tipping Far Eastern funds as likely star performers during 1993. Money flowed out of Japan-invested trusts, which suffered net redemptions of pounds 68m. European funds suffered net outflows of pounds 44m.
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