£423m withdrawn from UK-focused funds in August

Written by Oliver Wade

Investors have continued to pull money from UK-focused funds in August, with a further £423m being withdrawn from the sector, revealed the latest figures from the Investment Association.

As a result of this, the total amount of money pulled from UK equity fund managers has escalated to a “whopping” £10.2bn since the Brexit vote 16 months ago, said AJ Bell personal finance analyst Laura Suter.

Suter added that investors’ fondness for “spreading their risk around the globe” has continued, with global equity funds netting another £417m inflows in August, while investors also place £66m into North American funds and £47m into emerging market funds.

UK bonds have seen almost £13bn flow into them in the months since the referendum. However, Suter suggested that concerns about the Bank of England raising interest rates has led investors to get “jittery” about bonds, as August marked net outflows of £259m from UK bond funds.

“Just how nervous investors are feeling is reflected in overall inflows in the month. August saw investors pull £217m from funds, compared to more than £4.5bn of inflows in the same month last year – a reduction of 105%,” Suter added.

“Across the industry the amount UK investors actually hold in funds remained pretty flat compared to the month earlier, as rising markets mean that growth in assets compensated for much of those outflows.”

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