• Investors returned to UK markets after election bounce
• Property funds see largest inflows since July 2018
• Absolute return funds reach £8bn of outflows since investors started withdrawing funds
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“Fuelled by the post-election bounce in the stock markets and before Coronavirus jitters hit the market, investors were in a jubilant mood on January, putting their money to work in a range of asset classes that have seen consistent outflows in the months before that.
“UK equities clocked up pretty consistent outflows throughout 2019, but investors returned to the markets in December and this continued in January, putting £355m into UK-focused funds. It means that investors have put £1.1bn into UK funds over the past six months, although over the past year the outflows still stand at £1.1bn. It wasn’t alone, with global, emerging market and North American funds all seeing decent inflows in the month.
“Property had its first month of inflows since March last year and its largest inflows since July 2018, with £60m put into property funds. Even UK direct property outflows slowed to a negligible amount, following December’s sizeable outflows of £263m after the M&G Property fund closure alarmed some investors.
“Absolute Return managers were not spared another month of being clobbered, seeing more outflows in January – although at their lowest level since February last year. The £120m of outflows means the sector has seen £4.4bn of outflows over the past year. The sector has clocked up £8bn of investor money heading for the door over the 19 months that it’s seen consistent outflows – grim reading for fund managers in the sector.
“All eyes will be on the data next month, as we see the first signs of how much the Coronavirus market swings have affected investors in the usually-busy ISA season. Signs from AJ Bell customers show that most are sticking to their investments and resisting the urge to panic or tinker too much.”
