FTSE 100 funds bled £2bn in June, but who is losing out?
UK large cap funds, which invest in FTSE 100 companies, saw investors pull over £2bn from them during June, as losses began to concentrate in a select few asset managers.
Analysis from Morningstar, which examined all UK-domiciled open-ended funds, found that around £3bn was pulled across all funds throughout the month, bringing the total since the start of the year to £17.4bn.
Investors pulled £2.2bn from the £77bn in UK large cap equity funds throughout the month, bringing their losses to £6.2bn since the year began.
Other losers included Sterling Corporate Bond funds (-£1.2bn), Sterling Flexible Allocation funds (-£779m) and Global Large Cap Growth Equity funds (-607m).
So which fund houses are investors pulling their money from?
Two main sources: bond-focused asset managers, and the Scots.
Which UK fund houses are losing money?
While sustainably labelled funds suffered less outflows than their mainstream counterparts, asset managers that focus on ESG saw significant withdrawals, with Royal London losing £483m and M&G losing £234m throughout June.
This is likely due to both fund houses also focusing on bond funds, which saw massive withdrawals during the month, losing £1.9bn.
Indeed, two of the top four funds for outflows during the month were bond funds, with Aviva’s Corporate Bond fund and Schroders’ Multi-Manager Global Investment Grand Bond fund both losing around £800m.
Meanwhile, the two giants on the Scottish scene of Baillie Gifford and Abrdn lost the most and fourth most out of every asset manager, bleeding £659m and £227m respectively during June.
Abrdn and Baillie Gifford have lost the most of any fund groups since the start of 2024, with a whopping £708m and £4.8bn pulled from them respectively by UK investors.
Despite the negative flows, American giants have managed to continue receiving inflows to great success, bringing in £522m and £371m respectively from UK retail investors during the month.
This is due to index funds as a whole continuing to receive positive inflows, bringing in £2.5bn throughout the month.
Other benefactors of the continued success of passive funds include HSBC (£501m) and Fidelity International (£253m), who have also managed to keep year-to-date- flows above water.
Giovanni Cafaro, analyst at Morningstar, explained that the trend of outflows from UK equities had persisted since early 2020.
The total assets in UK equity funds reached a peak of £280bn in 2017, but is now down to about £200bn.
“Within the broader UK-domiciled equity fund universe, some of the main beneficiaries of this reallocation, to an extent, have been global, US and emerging markets equity as well as sector funds, including ecology, infrastructure and healthcare,” explained Cafaro.
“Headwinds driving outflows included the relative performance of the market, as well as its sector composition, notably exhibiting a lower exposure to technology names which, in contrast, prevail in US and global indices.”