UK investors withdrew £482 million from European funds in April, as £678 million poured into global equity income vehicles, according to the Investment Association (IA).
Over the month the global equity income sector was the most popular as investors looked to dividends amid share price volatility.
Total flows into investment funds reached £553 million in April, according to IA data, after outflows the previous month climbed to £3.5 billion.
According to the IA, after a record first quarter for outflows totalling £7.1 billion, retail fund sales were boosted in April by “Isa season,” as savers allocated £683 million to the tax efficient wrapper.
Investors moved to exit fixed income following March interest rate hikes from both the Federal Reserve and the Bank of England.
Investment flowing out of fixed income vehicles totalled £18 million in April, in contrast to the £3.3 billion of outflows recorded in March.
Flows into responsible investment funds increased by nearly 30%, jumping to $1.2 billion in April, up from £935 in March.
The worst performing sector over the month was UK All Companies, for which outflows reached £486 million.
In terms of asset classes, mixed asset funds were the best seller, with net sales climbing to £576 million.
Other funds, which includes targeted absolute return and volatility managed funds, had inflows of £457 million.
Funds flowing out of money market vehicles climbed to £22 million, while equity outflows totalled $435 million.
“Savers returned to the fund market in April as we saw inflows boosted by ISA season. Although inflows to Isa wrappers, based on IA data, were half those of 2021, they were still the third strongest in the last five years,” said Miranda Seath, head of market insight at the IA.
“The IA Global Equity Income sector became the top-selling IA sector for the first time in April. This was not just driven by investors looking for alternative sources of income. As the outlook for equity growth weakens, investors have looked for funds investing in companies that pay good dividends consistently to top up the overall returns equity investors receive.”
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