Outflows continue from UK funds

Outflows from UK open-ended funds continued in March, with investors pulling out £5 billion (€5.8 billion) continuing the negative trend seen over the last 12 months.

The total outflow for these UK-domiciled funds is now set at nearly £30 billion since April 2018.

According to research by Morningstar, “Brexit is causing noise in flow data as investors move assets from UK-domiciled funds to Luxembourg – or Ireland – domiciled equivalents”.

UK and European equity markets are also particularly out of favour with investors, who withdrew £1.3 billion from these in March.

As the previous Brexit deadline loomed, March did see money market funds preferred by investors over other asset classes, as they bucked the trend of outflows for the month.

“Given the uncertainty about Brexit, it is no surprise that investors have chosen to move assets into lower-risk funds,” said Bhavik Parekh, associate analyst at Morningstar.

Money market funds saw inflows of £555 million throughout the month. Fixed income also had inflows of £337 million, offering “the only ray of light at an otherwise gloomy time for long-term investment funds”, Parekh said.

©2019 funds europe

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