UK All Companies sector sees largest outflow, at £1bn in May – bigger than in the month after Brexit
Outflows from UK funds have now reached £9.1bn since the Brexit two years ago
Investors withdrew from equity markets broadly, with an 84% fall in the flows to equity market funds between April and May
Bond funds are back in favour, with £361m of inflows
Total assets under management fell 7%
The latest figures from the Investment Association can be found here.
Laura Suter, personal finance analyst at AJ Bell, said:
“Investors pulled another £1.2bn of money from UK-focused funds in May, taking the total net withdrawals since the Brexit vote to more than £9.1bn.
“A clear sign of investor nerves around Brexit and a sluggish UK economy is shown in the fact that the outflows from UK All Companies sector were higher than the aftermath of Brexit, with almost £1bn of investor money withdrawn from these funds in May. The UK Equity Income sector was also hit with redemptions, as almost £300m was withdrawn in the month alone.
“Investors are increasingly wary of stock market investments, with the amount invested in equities in all countries falling dramatically between April and May, from £1.6bn to £263m.
“The areas still in favour with investors remain global funds, Japan funds and North American equity funds.
“Showing further signs of nervousness, investors went back into the bond markets in a big way in May, with £361m committed to bond funds. Within this group, strategic bond funds returned to favour, after withdrawals in March and muted inflows in April, seeing £168m invested during May.
“Targeted Absolute Return funds were the best-selling sector for the month, with £515.6m of net inflows – and marking the first time in more than a year that the sector has been the best seller.”