Last minute ISA rush

Despite current stock market volatility, this week is still expected to be the busiest of the year for ISA sales. Analysis of industry data by Prudential reveals that for the tax year 2006/07, 17 per cent of stocks and shares ISA sales occurred between 1 and 5 April 2007 and 38 per cent took place between 1 March and 5 April 2007. The corresponding figures for the tax year 2005/06 were 16 per cent and 44.8 per cent.

In terms of where people are investing their ISA allowance, Prudential’s analysis of industry data reveals that the Cautious Managed Sector is by far the best-selling among the 30 classified by the Investment Management Association. The next two best-selling sectors for November, December and January were Global Growth and UK Money market funds. Sales of Cautious Managed funds were overwhelmingly through financial advisers with around 95 per cent of net new sales in the three months being generated by intermediaries, Prudential says.

Gary Shaughnessy, Managing Director of Prudential Retail Life & Pensions said: “There are many options open to investors when it comes to using their ISA allowance and if they are nervous about having too much exposure to equities, they can opt for funds that invest in a more diversified range of assets including cash, bonds, property and also equities. This is what cautious managed funds do and this helps explain why they are so popular with investors at the moment.”

Research from Prudential reveals that between January 2008 and 5 April 2008, 10.37 million people were considering investing in a stocks and shares ISA. However, two thirds of them intended to invest less when compared with the last tax year, and only 3 per cent intended to invest more. Around one in five were going to invest about the same amount and 9 per cent were unsure.

The Prudential Cautious Managed Growth ISA enables you to spread your money over a wide range of different assets including stocks and shares, property, and government bonds - and around the world. This helps to reduce the risk, because if one type of investment isn't performing well, the spread of risk can potentially help to balance any losses. The ISA’s objective is to deliver long-term total return - a combination of growth and capital. You can invest as little as £500 as a lump sum or set up a monthly direct debit for as little as £50 (or do both). You can also make free withdrawals at any time (please note there's a minimum of £250 each time).

For further information on the Prudential Cautious Managed Growth ISA, visit lastminuteisa.com.