• Property funds clock up £1.8bn of outflows
• Investors move back into UK equities, to benefit from ‘Boris Bounce’
• Absolute return outflows hit £7.5bn
Laura Suter, personal finance analyst at investment platform AJ Bell, comments on the latest Investment Association fund flows data:
“All eyes were are property funds after the suspension of the M&G fund in December, and the flows figures show just how tough it’s been for the sector recently. Direct UK property funds saw £150m of outflows in November. This takes the total pulled from the funds to £1.8bn in the year to the end of November, showing the extent that investors abandoned the asset class in 2019. There are already reports of an increase in property fund withdrawals from investors after the M&G suspension, meaning this figure is likely to climb higher when December data is in.
“UK equity funds* had a rare month of inflows in November, with investors committing £108m to the UK. This followed pretty flat figures for October and means that investors were primed to benefit from the rebound that UK markets saw in December following the general election result. Despite the inflows in November, investors on the whole have pulled almost £3bn from UK funds in the 12 months to the end of November. Considering the FTSE 100 finished 2019 up more than 17% and the FTSE 250 rose 29% during the year, these investors may be regretting that move now, with the benefit of hindsight.
“One trend that’s likely to continue well into this new decade is the mass outpouring of assets from the Absolute Return sector. There’s been consistent, meaty outflows from the funds since July 2018 and November saw the highest outflows since the start of 2019, with £656m pulled. Outflows since July 2018 now total almost £7.5bn – meaning that £1 for every £11 invested has been withdrawn during that period.”
