Isa sales rocket in wake of property fund boost

Fund supermarkets are reporting large increases in Isa sales for the first quarter of 2006 compared with the same period last year.

Fidelity’s FundsNetwork announced Isa sales of 1.1bn over tax-year 2005-06, up 55% on the previous year, while Isa sales on Skandia’s MultiFunds platform are up 62%.

Rob Fisher, head of marketing at FundsNetwork, says there has been a recovery trend in Isa business over the past few years. “More people are investing in Isa business and people are using platforms more,” he says.

For the past three months the specialist sector has been the biggest seller for FundsNetwork, knocking UK Equity Income from first to second place.

Fisher says this is primarily the result of strong sales by property funds. “New funds are coming onto the platform in the property sector,” he adds. “It is the biggest factor that has made a difference. Other popular ones are in natural resources. As of January, property funds could be included in Isas and what is happening now could be a little bit of catch-up, a result of the pent-up demand.”

Meanwhile, Fidelity International’s own Isa sales are up 47%, totalling more than 1.5bn for the tax year 2005-06. Total gross Isa sales, via all distribution channels, from January 1 to April 5, 2006, are 655m, an increase of 55% on the same period last year.

Isa collection points on April 5, run jointly this year by FundsNetwork and Fidelity, proved popular with advisers, attracting 12m in Isa investments in a single day.

Skandia also notes an increase in popularity in specialist funds over the past tax year, with three property portfolios among the 20 best-sellers.