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Exodus from UK assets gains pace as Brexit looms

BrexitJigsawGlobal investors shunned UK assets in July as the possibility of a hard Brexit increased following the rise to power of Boris Johnson as the UK’s prime minister.

The exodus from UK equity funds gained pace, with net outflows hitting £1.6 billion (€1.7 billion) throughout the month – the highest since April – as investor sentiment for the market deteriorated further.

Alternatives funds saw their 21st consecutive month of outflows. Despite negative flows being down from their late-2018 peak, investors drew out nearly £1 billion from the troubled asset class, according to the latest figures from Morningstar.

Property funds, especially those invested in UK assets, saw investors withdrawing £417 million – the highest amount since January this year.

Fixed income funds, on the other hand, saw net inflows for the fifth consecutive month, as investors continued to seek lower-risk assets. Net positive flows into the asset type reached £428 million during July.

Despite this, overall UK funds flows for July remained in the red – with net outflows of more than £2.4 billion (not including money market funds).

Money market funds enjoyed inflows for the sixth consecutive month, with investors putting £78 million into the asset type – not enough to offset the overall outflows from UK assets in July.

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