Archives

• 2012
• 2011
• 2010

Investment Funds ISA

[ View the full report ]

Since the ISA wrapper was introduced in April 1999, the structure has gone from strength to strength and gained popularity among the investing public, allowing access to investment returns free of capital gains tax.

The tail-end of the 2010-2011 tax year saw a rush of investors injecting money into ISAs with these funds posting net sales of £956m between 1 March and 5 April. These last minute ISA buys led to the highest net sales recorded during this period of the year since 2002.

Investors can choose to save half of their ISA allowance (£10,680 for the 2011-2012 tax year and £11,280 for the following year) in a cash product and invest the other half in stocks and shares. They can also decide to invest their whole allowance in stocks and shares.

Although they could, in theory, buy any listed company’s stock, investors, more often chose to access the financial markets through financial products, such as managed funds, OEICs and investment trusts.

The investment ISA universe caters for all types of investor and this brings with it an added appeal. Some products suit first-timers looking for something conservative while others are more appropriate for more experienced investors who want long-term capital growth. Even investors on the hunt for a more niche or risky exposure can find a product to meet their needs and also fit into the ISA wrapper.

Furthermore, planned regulation changes can ensure that any failure of a product provider has a reduced negative impact on investors.

In December, the treasury announced plans to allow ISA savers to re-invest their assets should the product provider (be it a bank or an asset management company) collapse.

At present, any investment lost due to failure of the provider is counted as part of the yearly ISA allowance. Under revised rules, savers should be able to invest an amount to that lost without affecting their allowance.

Investment ISAs serve as an introduction for investors to the world of fund management, all through a wrapper with which they are familiar and which also provides tax benefits.

These products allow fund managers to begin to build brand awareness among investors and should they be satisfied with their investment ISA, this group of savers may consider extending the fund manager’s mandate to include other financial products.

Therefore the aim of this study is to increase understanding of those investors who currently invest in managed fund ISAs and who plan to allocate more money to this product type going forward.

This report will:

• Classify who is buying investment ISAs. The report covers the demographics and behaviour of this group of investors
• Identify the appetite for different types of investment ISAs, including asset classes and regions
• Forecast expected asset flows into investment ISAs over the coming year
• Find how investors buy investment ISAs; do they go direct or through an adviser? Do they plan to take the same route when making future allocations?
• Illustrate the likelihood of this group allocating new money into these products
• Rank the asset management companies which investment ISA savers think are the
  most capable.

The report also goes deeper to reveal psychographic typology within this part of the market and identifies any clear subsets that exist within and detailed information as to their attitudes and behaviours:

• How they buy and form trust with financial services providers;
• What products and asset types they hold;
• The size of the investment ISA universe and its attraction in terms of product holdings, investment amounts and investor numbers;

Through careful information and data collection CoreData was able to segment investors into separate and distinctive groups based largely on the answers they provide to a broad range of carefully constructed behavioural and attitudinal questions.  Responses were collected from several hundred sophisticated investors sourced from an industry investor database of approximately 1 million people and who are active investors.

Data was collected through an online questionnaire that was distributed throughout December 2011.

The report will arm product manufacturers, advice firms and marketers with the insight required to fully understand what warms the buyers of investment ISAs to certain factors within an offering and therefore the best strategies to tailor their products to meet the needs of these investors.

The research will seek to deliver product providers an in-depth understanding and quantifiable categorisation of the various types of individuals who save through investment ISAs within the UK financial services market today.

It will also aim to estimate the future growth of the investment ISA market in terms of assets investors plan to allocate to these products.

• Bank Backlash
  In Australia, every time there is an interest rate announcement from the Reserve Bank of Australia (RBA), there is an inevitable backlash against the banks for raising their interest rates above the RBA’s increase, not passing on the full RBA cut, or like what happened in early February … […]
• Cashing Out?
  For the past four years Australians have been world class cash hoarders, adding  almost $50 billion a year since 2007 – almost half of which has flowed into the balance sheets of Australia’s big two banks, CBA and Westpac. Cash still remains the most attractive asset class in … […]
• Skills Shortage
  This year, the news pages have been dominated by redundancy announcements, which may lead one to conclude that there’s a big pool of talent out there just waiting to be hired. But the latest unemployment figures from the Australian Bureau of Statistics (ABS) tell a different story. Australia’s … […]