June saw UK investors continue to pull money from UK equities – but the country’s Investment Association (IA) says the new government could make people feel more positive about domestic companies.
UK funds saw net retail outflows of £1.05 billion during the month, which followed a record withdrawal the previous month.
Meanwhile, there was a record monthly inflow of £868 million into Europe ex UK sector funds.
Miranda Seath, director, market insight & fund sectors at the IA, said: “Investors thrive on greater certainty and in the UK, investor sentiment should be further improved by the new Government’s commitment to driving growth and maintaining fiscal responsibility. Following a prolonged period of outflow, we are beginning to see conditions that could give a boost to UK equities as we move into the autumn.”
More broadly, June saw a return to inflows as investors opted to allocate capital back into equities, Seath said.
UK savers put £1.2 billion into funds as inflows bounced back in June, with the figure bringing overall inflows for the first half of 2024 to £1.7 billion. This contrasts with £5.6 billion outflows in H1 2023 and £18.6 billion outflows in H2 2023.
Figures from Calastone recently showed outflows from UK-focused funds stood at £207 million in July – the lowest monthly level since a three-year outflow trend began.
