The return of the private investor

Leading fund management group, F&C Investments, has today reported its full-year business flow figures for 2006, revealing a 98% increase in net sales of UK retail open ended funds over the previous year.

This compares to an industry wide increase of 87.5% in net retail fund sales according to data released on Monday by the Investment Management Association. During 2006 F&C saw net sales of UK open-ended funds of £309 million compared to £156 million in 2005.

F&C points out that its own industry beating net sales growth was delivered across a broad range of products and without the presence of an open-ended property fund in its retail fund range. Property funds were among the best selling retail funds during 2006, with net retail sales posting a staggering 568% increase from £539 million in 2005 to £3.6 billion.

Nick Criticos , Head of Retail at F&C Investments, commented: "Retail fund groups often rely on one star product to generate a significant proportion of their sales which naturally carries risks but pleasingly we have seen strong flows across our UK equities, ethical, multi-manager and corporate bond funds. This is a solid platform for further growth. Furthermore, new business has been buoyed by strong investment performance with 36% of our actively managed retail funds finishing 2006 in the top quartile of their sectors and 63% above their sector medians."

"By all accounts 2006 was a good year for the UK retail investment industry with strong fund flows underpinned by buoyant markets. Although shares experienced a sharp sell-off in May, investors took this in their stride, with the fourth quarter remaining solid for us. This is a sure sign of much improved investor confidence which should bode well for the first quarter of 2007."

"We believe that equity markets, supported by high levels of global liquidity and ongoing M& A activity, will remain positive through the first quarter which should in turn help sustain this trend. However, the main uncertainty with regards to this scenario is whether recent interest rate rises – and fears of more to come - prompt the public to re-focus on paying down debt or favour deposits over stocks and shares ISAs."

"Although 2006 saw overall net retail fund sales at a six year high, the picture is more confusing in the ISA segment. Industry net ISA sales were slightly negative in November and the latest crop of data from the IMA indicates that net ISA sales in December, while positive, were lower than the same month in 2005."

"We believe that the Chancellor should seize the opportunity to boost confidence in this important part of the savings market at his next Budget by raising the allowance from £7,000 to at least £10,000."