UK equity funds out of favour due to Brexit as outflows hit £315m
The UK is "firmly out of favour" with equity fund investors as outflows hit £315m in July.
Outflows have totalled £3.5bn so far this year over ongoing Brexit uncertainty, data published by the Investment Association today shows.
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Funds in the UK were hit the hardest in July but Europe and North America also saw outflows of £156m and £256m respectively.
"Net retail sales were positive in July as savers placed almost £1bn into UK authorised funds," Investment Association chief executive Chris Cummings said.
"However, amid trade tensions, the story remains one of equity outflows and waning risk appetite.
"Fixed income and mixed asset funds attracted strong inflows, as did volatility managed funds.
"Within the equity sectors, the UK is still firmly out of favour amid Brexit uncertainty, with outflows totalling £3.5bn since the beginning of the year.”
Global funds were the best selling sector in July with net retail sales of £397m, and the best performing asset class was mixed asset, with £549m in net retail sales.
The worst-selling Investment Association sector in July this year was North America, with an outflow of £293m.
AJ Bell personal finance analyst Laura Suter said: "The biggest outflows from a single sector of the month came from North American equities as investors got jittery about the ongoing risk of trade wars escalating, with almost £300m of net outflows.
"This marks a stark turnaround for a sector that has seen pretty consistent inflow so far this year, with £1.2bn of investor money pouring in for the first six months of 2018.
"However, UK investors are not any more cheerful about the prospects of growth on home soil, with £316m of net outflows from UK-focused equity funds."
"UK equity funds saw their fifteenth consecutive month of outflows, taking the total withdrawn over that period to £6.5bn," Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
"By now this is water off an increasingly small duck’s back, prompted by investor aversion to a market that comes tinged with Brexit uncertainty."