After running for cover during January’s financial market turbulence, UK investors were more positive in February, according to the latest Fund Flow Index from funds network Calastone.
UK investors added a net £1.09bn to their equity-fund holdings during the month, having been net sellers in January.
Rising bond markets also prompted the largest inflows to fixed income funds since June 2023, making February the third best month on Calastone’s 10-year record for the sector.
UK-focused funds saw accelerating outflows – the sixth worst month on record as investors increasingly focus on the US.
Optimism on equities was not indiscriminate, however. UK-focused funds endured another bad month, shedding a net £1.22bn, the sixth worst month on record.
The outflow came despite the UK index outperforming global markets in February, ending the month up by 1.6%, compared to a 0% for the wider world. Japan, Asia-Pacific, Emerging Markets, European and specialist sector funds all saw outflows too, though these (except Asia-Pacific) were at relatively low levels.
The big winners, once again, were Global and North American funds, which garnered net inflows of £2.09bn and £770m respectively. Given the 60% weighting of US equities in typical global funds, inflows to this sector are also a vote for the US stock market.
