Rise of the ISA investment
Figures released today by the Investment Management Association (IMA) show that gross sales of Individual Savings Accounts (ISAs) were the highest ever for any October. They were also the highest monthly figure outside the ISA season since June 2000.
Over £956 million was invested inside the ISA tax wrapper during October. This was due mainly to the ability of those over 50 by the end of this tax year to invest up to £10,200 into an ISA, from 6th October.
The annual ISA limit of £7,200 remains in force for those investors who have not reached their 50th birthday by 5th April 2010. Those who have reached this age were able to top-up any ISA investments already made this tax year by a further £3,000 in October.
The annual ISA limit is increased to £10,200 for every investor from 6th April 2010. Investors will be able to place up to £5,100 into the cash ISA component and the balance of the annual limit into the stocks and shares ISA component.
In terms of actual investments made, equity funds proved the most popular asset class. This was followed by ‘other’, which was mostly driven by the Absolute Return and Unclassified sectors. In third place was Bond funds. This is the second consecutive month in which Equities have beaten Bonds in terms of investment sales.
Looking at specific IMA sectors, the IMA Property sector was the most popular sector for investors, taking in £367.6 million of net retail sales, the highest since May 2007.
Property funds have witnessed positive net retail sales for seven consecutive months. This is in sharp contract to November and December last year when Property was the lowest selling sector.