The Investment Association has released fund sales data for April today showing:
• April saw the first month of overall inflows in 2019
• UK equity outflows slow to just £3m
• Global funds see highest inflows on record
• Absolute Return funds clock 10th month of outflows – totalling £4.7bn
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“Investors returned to markets in April, with the last-minute ISA season flurry helping to boost flows, as investors put £2.2bn into funds overall. This compares to £2.8bn of money invested in funds last April, although total assets in funds remained flat compared to year ago, at £1.2 trillion.
“While the flows mark a stark contrast to investors continually pulling money out in recent months, savers are still cautious. Until we reach a resolution on Brexit, talk of trade wars dies down and the political situation in the UK is more stable, this is unlikely to dramatically change.
“Investors have sold £4bn of UK equity funds over the past year, although April offered some reprieve with outflows slowing to £3m, compared to last month’s £445m of outflows. A large chunk of this will be down to investors pulling their money out of Neil Woodford’s Equity Income fund in their droves in April, with £126 coming out of the fund that month, before the fund fell by another £560m in May.
“There were rosier signs elsewhere, with Global funds seeing £934m of inflows – its largest inflows on record. It has been the favoured sector for more than three years and global funds have hoovered up £4.3bn of assets over the past year. However, Europe ex-UK funds still clocked up £359m of outflows, while investors pulled £120m from American funds and £171m out of Japan. Despite the ongoing talks of trade wars, Asia Pacific and China funds clocked up of inflows of £92m.
“Continuing its trend of being one of the most unloved sectors, the Targeted Absolute Return sector notched up its 10th consecutive month of outflows, as investors withdrew another £501m from the funds. It means that over the past 10 months investors have pulled more than £4.7bn from the funds during that time.”