Private investors put £1.6bn into funds-survey

Private investors put just less than £1.6 billion (#2.03 billion) into investment funds excluding pensions in 2000, according to figures released by the Irish Association of Investment Managers. But the figure was just 3 per cent up on 1999. Special portfolio investment accounts (SPIAs), tracker bonds and with-profit funds lost out to unit funds during the year.

The small increase in inflows reflected a tendency to spend rather than save and showed the need to encourage people to save, according to IAIM retail funds committee chairman Mr Noel Minogue.

Retail investors concentrated on unit funds last year, the figures show, with net inflows into unit trusts and unit-linked funds up by 9 per cent and 6 per cent respectively. Some £229 million was invested in unit trusts in 2000, following investments of £211 million in 1999 and £100 million in 1998. Net flows into unit-linked funds - the biggest investment category - of £807 million in 2000 followed investments of £760 million in 1999 and £195 million in 1998. The biggest loser was special portfolio investment accounts, where net funds invested fell by 25 per cent to £51 million. This followed a 60 per cent fall in 1999. The £51 million invested on such accounts in 2000 compared with investments of £68 million in 1999 and £168 million in 1998.

The fall in flows into special portfolio accounts reflected the erosion of the tax benefits associated with this type of investment. Strong inflows in 1998 largely reflected transfers from deposit accounts which have fallen back in the last two years. Net flows into tracker bonds - where the fund managers track chosen market indices - were down 17 per cent to £210 million from £252 million in 1999 and £219 million in 1998. Some £260 million was invested in with-profit products, down 4 per cent from £270 million in 1999 and £89 million in 1998. The value of personal investment funds managed by IAIM members increased by almost 15 per cent to £13.4 billion last year. But net inflows accounted for most of this increase with a rise in market value of just 1.08 per cent for the year. Unitised funds accounted for 54 per cent of the total by value followed by with profit funds at 30 per cent and tracker bonds at just over 8 per cent.

The survey covers all investments managed by IAIM members for private investors.