Sales of Individual Savings Account (Isa) funds fell by more than a third last month, as stock market concerns worried investors.

The Investment Management Association, which represents the UK unit trust and investment management industry, said net sales were 35% less in June than May and year on year net sales were also down by 35% to �308m.

Repurchases or fund transfers were also down, indicating that although people were uncertain about stock market conditions, they were "sitting tight".

Repurchases in June 2002 were down by transfers between funds had dropped by 46.6m in June compared to May.

The IMA said that the fall in sales was down to investors not committing new money, rather than mass panic withdrawals.

Richard Saunders, IMA chief executive, said: "It is encouraging that, despite falling markets, there has been no significant increase in repurchases, suggesting that investors are not indulging in panic selling.

"They appear to understand that volatility is an inherent part of stock market investment and realise the need to stay invested for the long term."