ISA sales soar

Investment chart

ISA sales topped £300 million in October, as the over 50s stuffed more money into their stocks and shares ISAs to take advantage of the new limit.

A combination of the larger allowance (£10,200) for people aged over 50 and a renewed confidence in the stockmarket resulted in the highest ever ISA sales for any October. Net sales hit £301.1 million, almost double the amount seen in September (£162.3 million), according to the Investment Management Association (IMA).

Richard Saunders, IMA chief executive, says: "ISA sales are clearly heading for their best year since 2002."

Fidelity International is one provider that experienced a significant uplift in ISA sales in October.

"Clearly the key driver has been the increase in the ISA allowance for the over 50s – this has driven a four-fold increase in ISA investments coming from this group of investors compared to October last year," says Rob Fisher, head of UK investments at  Fidelity. '

"The over 50s really have grabbed the opportunity for extra tax relief with both hands. Whether topping up an existing ISA or opening a new one, a broad range of regions and asset classes seem to appeal to them, ranging from UK equities and income funds to south east Asia and China."

According to the IMA, the most popular sector for ISA investors in October was cautious managed. Within Fidelity FundsNetwork, many investors plumped for the firm's ISA Cash Park product, although specialist funds such as JPMorgan Natural Resources and BlackRock Gold & General proved popular in October too.

Broader IMA data that includes non-ISA sales revealed that bonds are now out of favour and property is the new hot investment. In October, the property sector was the highest selling sector for investors, while the sterling corporate bond sector saw an outflow of £11.8 million.

Away from investment data, the association has been busy campaigning to make structured products more transparent, and making room for offshore funds in their sectors.

An IMA spokeswoman says that since structured products market themselves as investment products, they should disclose everything that IMA members do. It hopes the Financial Services Authority's Retail Distribution Review, due to come into effect in 2012, and the Packaged Retail Investment Products proposals from the European Commission will bring this about.

The European Commission is expected to issue a consultation on structured products in the next few weeks.

Meanwhile the association is tasked with fitting in more than 600 offshore funds into its sectors. Luxembourg and Dublin domiciled funds that are FSA-recognised will be included in the IMA's sectors from early next year. Currently only UK-domiciled funds are covered by the IMA.

According to HSBC Global Asset Management and Baring Asset Management, one of the big changes will be the arrival of some star emerging markets funds. Over the past three years, the top performing funds in the China, India and Latin America sectors were offshore funds.

'This change could see the emerging markets peer group expand significantly, introducing a whole new range of leading funds and managers,' comments David Chellew, head of market position at HSBC Global Asset Management. 'This increased visibility of offshore funds will level the playing field.'

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