A combination of surging Covid infection rates, regional lockdowns and failed Brexit negotiations led to a flood of outflows for UK-focused equity funds in October, according to funds network Calastone.
The firm, which publishes the Fund Flow Index (FFI), said October was the fourth worst on record for UK equity funds with outflows of £358 million (€399 million).
Furthermore, the figures show that UK equity funds are one of only two categories to have seen five consecutive months of outflows.
The other category is income funds, which also saw their worst ever month with £763 million in withdrawals as sell orders effectively doubled that of buy orders – something which Calastone ascribes to the fact that they are disproportionately invested in UK equities.
In contrast, European equity funds also suffered outflows but they were far more modest at just £69 million. Meanwhile, funds focused on North America and Asia saw investors add capital in October.
Edward Glyn, head of global markets at Calastone, said: “The fact that UK-focused funds are suffering so much more than their European counterparts, despite the pandemic inflicting lockdowns equally severe in many parts of the continent, suggests that investors view the double whammy of Covid-19 and Brexit as uniquely damaging for Britain.”
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