UK investors added record levels of capital to equity funds in March as they bet on the post-Covid economic recovery, according to the latest data from funds transaction network Calastone.
In total, UK investors committed a net £2.96 billion (€3.42 billion) to equity funds surpassing the previous record seen in the post-crash bounce of April 2020 by over a tenth, the firm said.
UK-focused equity funds saw a net £610 million added to holdings marking a “startling” turnaround for the asset class, while global equity funds took in £1.84 billion. Meanwhile, global ESG equity funds attracted new capital to the tune of £1.15 billion.
Edward Glyn, head of global markets at Calastone highlighted that equity fund managers have enjoyed their best ISA (Individual Savings Accounts) season in years. “New capital has flooded in from investors keen to capitalise on the post-Covid economic recovery,” he said.
Active funds took in the lion’s share of investment, attracting over three quarters of overall net inflows (£2.32 billion). It was their best monthly performance since July 2015.
Active funds have now beaten their passive counterparts in four out of the last five months. In the run up to November 2020 active funds lost out to passives in 26 months out of 28, Calastone highlighted.
“The tentative first steps to recovering lost cash by active funds have transformed into leaps and bounds after several months of solid inflows,” said Glynn.
Funds investing in bonds attracted £757 million of inflows, while real estate suffered redemptions of £590 million.
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