Fund inflows jump to reach record August clip

British investors poured a record amount of money into funds during the typically quiet summer period.

£5.3bn in funds flowed into funds in August, the first time inflows have topped £5bn, according to the Investment Association.

A low interest rate environment, compounded by soaring inflation, has made investment funds more attractive to investors. 

Households looking for a home for savings amassed over the course of the pandemic has elevated inflows, which increased £500m over the last month.

Chris Cummings, Chief Executive of the Investment Association, said: “We have seen significant net retail sales to funds through the whole of summer 2021.”

“Investors channelled £14.5 billion into funds from June to August as rising inflation combined with low interest rates continues to make funds attractive for savers.”

Appetite for responsible and environment, social and governance (ESG) investing was strong in August, with £1.3bn of fund inflows registered during the month.

This is the seventh month this year where ESG inflows have topped £1bn.

“UK investors are maintaining their commitment to deploying their capital for environmental and social good as well as seeking a financial return,” Cummings added.

“In the run-up to the COP 26 climate conference in Glasgow, and as the UK government commits to generating 100% of electricity from renewables by 2035, investors can play an important role in helping to support the transition to Net Zero.”