Sales of unit trusts plunge 40% to pounds 664m

UNIT trust sales fell nearly 40 per cent last month from just over pounds 1bn in June to pounds 664m, according to figures from the Association of Unit Trusts and Investment Funds, writes Caroline Merrell.

July's figure was also 30 per cent lower than last year, when net unit trust sales were pounds 995m. Philip Warland, director-general, said the fall was through all distribution channels, but added that the biggest sales fall was from private client and pension fund channels. 'There does not seem to be any particular reason for the fall. It is pretty generalised. Perhaps it is because the stock market has remained pretty flat,' Mr Warland said.

Sales were depressed even though 11 new unit trusts were launched during the month. The July figure is the lowest since the beginning of the year.

Gross sales were pounds 1.407bn in July, compared with pounds 1.878bn in the previous month and pounds 1.663bn a year earlier. Repurchases in July this year were pounds 760m, compared with pounds 779m in June and pounds 678m last year. Funds under management hit pounds 98bn at the end of July compared with pounds 79bn in July last year.