Investors withdrew savings from UK funds in lead up to March Brexit deadline

Investors withdrew savings from UK funds last month as the Brexit deadline date drew closer with no signs of a deal.

Outflows from long-term investments reached £5bn, bringing the total outflows since April last year to almost £30bn.

Read more: European funds hit 11th month of outflows

Investors moved UK-based assets into European countries in the lead-up to the original Brexit deadline day on 29 March, with Luxembourg emerging as the biggest winner from the shift, analysts at Morningstar said.

UK and European equity markets were particularly out of favour with investors as £1.3bn was withdrawn last month.

“Brexit has made analysing fund flows from UK-domiciled funds difficult,” the research note said.

“In the months leading up to the deadline, investors and fund families became increasingly worried over the impact of an unfavourable deal and its negative implications.

“Fund families began to move assets into vehicles that are domiciled in Europe, primarily Luxembourg.

Read more: Fund outflows continue for fourth month as investors remain cautious

“As a result, outflows from UK-domiciled funds show both movement of assets into Lux-domiciled funds and investor withdrawals.”

The only long-term asset class that had a positive outlook in March were fixed income funds, which attracted inflows of £337m.