Share investments soar as consumers hunt for returns

Share investments soar as consumers hunt for returns
Consumers paid a record amount into investment funds last year as they looked for a better return on their money than putting it in the bank.


By Philip Aldrick
Published: 6:30AM GMT 03 Feb 2010

Net sales of UK-based unit trusts and OEICs (open-ended investment companies) shot up to £25.8bn, the highest level since records began in 1992, according to the Investment Management Association (IMA).

The figure was 45pc higher than the previous record set in 2000, when new investments totalled £17.7bn. It was six times higher than the £3.8bn of sales in 2008.

Related Articles

*
Isas: where to invest in 2010?
*
The rewards can be big
*
Warning of boiler room 'master list'
*
Gold: 'fundamentals remain strong'
*
Fund charges exposed as fees outstrip returns
*
Investors put record amount into funds

A spokesman said: "Low returns on savings accounts caused people to look at putting their money into other assets. At the same time, the recession caused them to increase their savings levels."

Overall, £9.9bn of new funds were invested in bonds and £7.3bn in shares over the year – a sharp turnaround from 2008, when people withdrew £1.3bn from the stock market. Richard Saunders, chief executive of the IMA, said: "This trend can be traced back to the autumn of 2008 in the immediate aftermath of the Lehman crash.

"Investors have prudently chosen wide diversification both across asset classes and geographically – in marked contrast to the previous record year of 2000. And it is good to see people once more investing via ISAs, after five years in which ISAs saw higher levels of withdrawals than investments."

Net new investment in ISAs, tax-free investment funds, climbed to £2.8bn – the highest since 2001.

The surge in investments, combined with strong stock market growth during the year, also helped to push up the value of funds under management to record levels.

At the end of December funds under management, including money held for institutional investors, totalled £481bn – £119bn more than in 2008.

http://www.telegraph.co.uk/finance/personalfinance/investing/7139872/Share-investments-soar-as-consumers-hunt-for-returns.html