Fund investors sold off stocks in June to take advantage of large gains and parking their cash in bonds for safety, data shows.
£1.2 billion (€1.3 billion) was sold off across equity funds in June, reversing inflows of £3.9 billion in the previous two months when asset prices had been attractive, according to Calastone.
UK equities saw their highest ever outflows at £679 million, outstripping redemptions around crunch-points such as the Brexit referendum and onset of the Covid-19 pandemic.
Global stock markets recently saw their best performance in a decade. By the end of June, the MSCI World Index had recovered around two thirds of its 2020 losses, Calastone – a funds transaction platform – said.
Most of the cash pulled out of equity funds went into fixed income and money markets. Inflows of around £927 million were split roughly equally between them.
Edward Glyn, head of global markets at Calastone said very high transaction volumes this year “testify to opportunistic trading”. Investors are currently “unusually engaged” with their holdings and unusually liable to switch from one fund to another, or to cash and back.
He also said the impact of dividend cuts, which is greater in the UK than in most other countries, was one reason for the UK equity funds’ poor fund flow performance, including record outflows from income funds.
