Monday 24 June 2024 3:36 pm

Good news doesn’t last as UK funds return to the red

By: Elliot Gulliver-Needham

Investors withdrew £1.3bn from UK funds throughout May, ending the month of strong performance that the sector saw in April.

Since the start of 2024, UK investors have pulled £13.9bn from funds, bringing the total amount in UK funds below £1.1 trillion, according to data from Morningstar.

While passive funds still saw strong inflows, bringing in £2.8bn, a slight decline in them from last month and a £4.1bn loss for active funds was enough to bring flows into the negative.

Money market funds were the only sector that managed to bring in new money, gaining £557m throughout the month. The worst hit was equity funds, losing £783m, though they are the largest fund group, with £713bn of assets.

Equity strategies focused on the UK specifically were hit even harder, with outflows of £2.4bn, totalling over £10bn

The worst hit proportionally were property funds, losing £140m throughout the month despite having only £7bn in assets

Meanwhile, after sustainable funds brought in less money than average for the first time ever in April, they lost only £61m throughout May, compared to £1.3bn for non-ESG funds. Throughout 2024, they have brought in £1.5bn, while non-sustainable funds have lost £14.1bn.

Giovanni Cafaro, an analyst at Morningstar Manager Research and author of the report, commented: “The overarching trend of investors’ preference for passive offerings has also continued. This has been a tailwind for fund houses offering passive products, including BlackRock which saw a further £1.7bn of inflows in May, totalling £7bn for the year-to-date.”

The fund that brought in the most money last month was the newly launched JPM Global Focus Fund, with investors splashing £1.4bn into the fund.

In contrast, investors pulled £463m from the HSBC FTSE All-World Index Fund, £422m from the Royal London UK Core Equity Tilt Fund and £419m from the Aviva Investors Corporate Bond Fund.

Total estimated new money (£)