Sales of investment fund ISAs hit a three-year high during April as people were tempted to put money back into the market, research showed today.
Net sales of UK-based unit trusts and OEICs (open-ended investment companies) held in a tax-free ISA wrapper reached £671.4 million during the month, nearly double the £347.7 million invested in March, the Investment Management Association (IMA) said.
Sales levels were boosted by the start of the new tax year on April 6, as investors either rushed to use up their ISA allowance before the end of the tax year, or made use of their 2009/2010 allowance.
But the amount invested in ISAs during April could not only be attributed to seasonal factors, as it was the highest level for three years and 44% higher than in April 2008.
The strong level of ISA investments helped to boost sales of all UK-based unit trust and OEICs to individuals during April.
Net sales, which strip out people cashing in their investment or moving it elsewhere, rose for the third month in a row to reach £2.07 billion, 18% more than during the previous month and 37% higher than in April last year.
Bond funds remained the most popular asset class with investors, with £1 billion of the £2.07 billion of net sales invested into these funds.
Richard Saunders, chief executive of the IMA, said: "Retail sales continued the strong showing of 2009 so far with inflows to bond funds in April exceeding £1 billion for the fifth consecutive month.
"The figures also confirm that April saw the highest ISA sales in three years."
But stock market falls have taken their toll on the total value of funds under management, including money held for institutional investors, with this falling to £374.9 billion in April, 17% lower than 12 months ago.