Sales of stocks and shares Isas hit a three-year high during April as people were tempted to put money back into the market, according to the Investment Management Association (IMA).
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.
Sales levels were boosted by the start of the new tax year on April 6, as investors either rushed to use up their before the end of the tax year, or made use of their 2009/2010 allowance.
IMA: bond funds most popular
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.’
James Daley, editor of Which? Money said: ‘Although the stock market has enjoyed a strong rally over the past couple of months, investors should continue to exercise caution as they reinvest their money.
‘One of the best ways to reduce the risk of investing in these volatile times is to drip feed money into the market every month.
‘This allows you to take advantage of cheaper prices when the market falls.’
For more information about investment Isas, see our guide to stocks and shares Isas.
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