• Property funds chalk up 13th consecutive month of outflows – totalling £1.8bn
• Equity markets back in favour - North America, Global and Asia Pacific ex-Japan see inflows
• Absolute Return funds haemorrhaging money - £7bn withdrawn since last summer
• UK equity funds outflows slow, to £6m
Laura Suter, personal finance analyst at investment platform AJ Bell, comments on the latest Investment Association figures:
“With the closure of the M&G property fund yesterday, all eyes will be on the outflows from the sector. October saw the 13th consecutive month of outflows, with investors selling £148m of property funds. Over that time the sector has seen £1.8bn of outflows, as people have yanked their money out amid fears about the Brexit impact on property prices and the liquidity of the funds. The M&G closure shouldn’t be a reason for panic selling across the sector, but instead it’s a good time for investors to check the cash levels in their funds, assess the liquidity in those portfolios and ensure they are comfortable with the holdings.
“If you cast your mind back to October, it was a month where Boris Johnson wrangled with the EU to get a deal, attempted to get his Brexit plan through parliament and then pushed for a general election, while the other parties debated the perfect date for a December election. This wasn’t an environment that made investors think they should invest in the UK. However, outflows slowed dramatically on the previous month, with £6m pulled from UK equity funds in October compared to £676m of outflows in September.
“Investors also dipped back into some equity markets, with overall inflows of almost £650m in October, compared to the £1.7bn of outflows the previous month – this marked just the third month of inflows to equities over the past year. Of the sectors in favour, North America funds saw £317m of inflows, global funds took in £225m of money and the Asia Pacific ex-Japan sector saw £154m of money invested.
“There was no reprieve for the Absolute Return sector, which chalked up its 16th consecutive month of outflows and the highest monthly outflows since the start of the year, with investors taking £566m of their money out of the funds. Total outflows since last summer are now almost £7bn and don’t look to be letting up any time soon.”
