Fund sales in the UK “bounced back” in August after a fall-off following the Brexit vote, according to The Investment Association (IA).
One notable trend was that a two-month run of positive global equity fund sales continued as investors sold out of regional equities.
The IA noted that “despite equity markets rallying since the initial fallout of the referendum result, UK investors continue to sell out of equity funds. However, global equity funds have received positive inflows for the past two months as UK investors move away from regionally focused funds”.
Anyone selling UK equity funds in August might regret it: in September the UK made the greatest positive contribution to European stock market performance, figures from S&P Dow Jones Indices show. The S&P United Kingdom index rose 1.97% while the S&P Europe 350 fell slightly and the figures also show that the UK is up more than 7% over the last quarter.
UK investors also sold off emerging market equity funds in August, leading the IA ‘specialist’ sector to see the largest outflows that month.
The emerging market outflows in the UK jar with wider European figures from Morningstar; global emerging markets funds saw inflows of €3 billion in August.
Chris Cummings, chief executive of the IA, said: “Net retail sales [in August] were £1.7 billion, reversing the Brexit related outflows of the past few months. However, caution is still evident as retail investors continue to prefer fixed income and absolute return strategies to traditionally more risky equity products.”
Fixed income funds were the best sellers, with over £1.2 billion of net sales.
Targeted absolute return was the most popular sector for the eight month in the past year, with sales of £480 million in August.
As well as net retail sales of £1.7 billion, the industry saw net institutional sales of £1.1 billion and funds under management reached over £1 trillion.
©2016 funds europe
