UK investors flee markets, selling £1.6bn of funds

Laura Suter
6 December 2018
  • Investors flee markets, withdrawing £1.6bn in October
  • Just two UK Equity Income funds delivered a positive return this year

The latest Investment Association figures show where investors allocated money in October.

Laura Suter, personal finance analyst at investment platform AJ Bell, comments:

“Investors fled from markets in October, with net outflows of £1.6bn in the month, compared to inflows of £5.3bn in October last year. Bond markets were hardest hit, accounting for £1.6bn of net outflows. Fears about falling property prices and the impact of Brexit on the sector led to investors selling £39m in property funds, which had their biggest outflows since August last year.

“Investors pulled another £214m from UK equity funds in the month, continuing a year of heavy outflows for the funds – now topping £10.8bn. But this may have been a savvy move as only two funds in the UK Equity Income sector have delivered a positive return this year* – Schroder Income and Schroder Income Maximiser – all others have handed investors losses. 

“Meanwhile, in the UK All Companies sector – the largest sector by far – just seven funds have delivered a positive return to investors, with the remaining 200 all delivering a loss. This is not a complete shock as the FTSE 100 is down 10% in the year so far, while the FTSE 250 is down 12%.

“The Targeted Absolute Return sector was the worst selling of the month, with investors pulling £705m from the funds. This is the fourth consecutive month of outflows, but the outflows are vastly higher than previous months, which were £470m combined.”

* Data from 1/1/18 to 5/12/18, based on funds over £50m. Source: FE

Laura Suter
Personal Finance Analyst
Laura Suter is personal finance analyst at AJ Bell. She is a multi-award winning former financial journalist, having specialised in investments. Laura joined AJ Bell from the Daily Telegraph, where she was investment editor. She has previously worked for adviser publications Money Marketing and Money Management, and has worked for an investment publication in New York. She has a degree in Journalism Studies from University of Sheffield.
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