UK fund outflows accelerate as cautious investors snub equities
Savers took almost £1.7bn out of UK funds during August as continued political uncertainty dampened their appetite for risk.
The new figures, published today by the Investment Association (IA) are the highest net outflows the sector has experienced since November last year.
Read more: Notion Capital opens £125m fourth fund
Equity funds took the biggest hit in August, with net retail outflows of £1.6bn, taking the sector’s total outflows for the quarter to £3.2bn.
The funds have consistently reported net outflows over the past year, with the exception of £543m net inflows in May and no overall movement in April.
IA chief executive Chris Cummings said equities had been “feeling the heat this summer after a third consecutive month of outflows”.
Mixed asset was the best performing asset class during August, with inflows of £706m – the highest figure for the sector since the start of the year.
“As in previous months, diversification remained savers’ top priority,” said Cummings. “Savers’ appetite for risk-focused solutions also continued to grow, with the IA’s Volatility Managed sector seeing healthy inflows of £230 million in August.”
Read more: Some of world’s biggest asset managers ‘paying lip service’ to ESG
North America funds were the best-selling of any region in August with net sales of £70m, while all other regions experienced net outflows.
Ethical funds experienced their fifth consecutive month of net inflows, but the flows of £232m were lower than the £248 seen by the sector in July. Total ethical funds under management hit £20bn in August, taking its overall share of the industry to 1.6 per cent.