Despite overwhelming hype from the financial industry, sales of tax-efficient individual savings accounts (ISAs) have more than halved this year, according to preliminary figures.

The Investment Management Association said that net ISA sales in February were �319m, down from �646m in the same month of 2001.

Overall, ISA sales for the first quarter of this year are certain to be down on 2001, the IMA said.

The end of the tax year on 5 April traditionally brings a rush to invest in tax-friendly investments such as ISAs, and a corresponding surge in advertising from financial services firms.

This year, however, weak stock market performance over the past few months has dissuaded many individual investors from putting their money into shares.

Mutual collapse

Sales of all mutual-fund investments did not fare quite so badly, falling only by one-third year on year in February.

Some niche markets, notably funds focusing on bond-market investments, have even recorded increases in investor interest this year.

Britain's FTSE 100 index of leading shares fell 16% last year along with most other equity markets, but investments in some bond markets have delivered positive returns.

Last week, Aberdeen Asset Management admitted that sales of its retail mutual funds were down 45% compared to the previous year.