Investors shrug off stocks slump

IRISH investors continue to plough millions into with profits equity bonds despite massive falls in stock value, figures released yesterday by Standard Life reveal.

The Standard Life With Profits Bond reported sales in excess of 160m in 2002, bringing the total invested in bond to 326.7m since its launch in March, 2001.

“While this figure is slightly down on last year, it still shows strong consumer confidence in with profits as a vehicle for medium- to long-term investing,” Standard Life marketing manager Nigel Dunne said. Mr Dunne disclosed that investment in the bond slowed in the second half of 2002 and this has been maintained in the beginning of 2003, but he revealed that in 2002 investment in the product was only down by close to 5%.

“There are a lot of investors buying units at the cheap prices that prevail at the moment and the prospect of growth is bringing the money in,” he said.

Standard Life has in excess of 100,000 Irish clients, serviced by 250 staff. The slowdown in investment in equity bonds may also be influenced by the decision of Standard Life and other assurance companies to cut bonus payments. Standard Life customers including pensioners, endowment and Special Savings Incentive Account (SSIA) funds holders, are facing bonus payments cuts of 15%, because of poor equity returns.

Falling stock market prices did not deter SSIA equity account holders from maintaining their investments levels. Standard Life limited the equity products to the top level contributions. SSIA sales in 2002 were 18.9 million up by 10.5 million.

Standard Life reported personal and corporate pension business up by 45% from 6.9m to 10.1m and 7% from 21.2 m to 22.7m respectively.

Standard Life has, according to chief executive Rory O’Riordan, seen considerable growth in the pensions market over the last number of years and has established itself as a leading provider of personal and corporate pensions: “We are extremely pleased with last year’s excellent results. Early indications are that we have grown our market share, particularly in the independent financial adviser sector. We believe independent advice is always important for the customer but even more so in current market conditions.

“Being a mutual and one of the most financially secure companies operating in the Irish market gives the customer confidence that the products we offer will continue to deliver competitive returns for those who wish to save over the medium to long term.”

Standard Life is Europe’s largest mutual life assurance company with has assets under management of over 110 billion and five million customers worldwide.