July saw £129mln withdrawn from funds, the data from the Investment Association (IA) showed, which compared to near-record outflows of £4.5bn in June and £822mln in May
Outflows from investment funds by UK savers slowed dramatically according to the latest monthly figures as fixed income funds started to attract their first inflows of the year.
July saw £129mln withdrawn from funds, the data from the Investment Association (IA) showed, which compared to near-record outflows of £4.5bn in June and £822mln in May. July was the sixth month of net retail outflows this year.
But there were inflows into many funds, with fixed income funds seeing their first month of inflows this year, while tracker funds also rebounded this month, especially fixed income trackers.
Most popular IA fund sectors were short-term money market funds and corporate bond funds, with net retail sales of £513mln and £495mln respectively, followed by volatility managed funds, UK gilts funds and global equity income.
Despite positive markets in July and August, ‘the combination of weak investor sentiment and weak flows has meant sector valuation has not increased commensurately’, said analysts at Citi, who noted that shares in listed fund managers have further de-rated.
The fund management subsector now trades around 20% below its long-term average, the analysts said, saying they remain “selective”, with a preference for ‘more defensive names with greater valuation dislocations’, with ‘buys’ for Amundi and Man Group PLC versus ‘sells’ for Jupiter Fund Management PLC/Abrdn PLC.
Meanwhile, investment trusts have been seeing record-breaking demand, according to data from the Association of Investment Companies (AIC) of purchases via financial advisers and wealth managers.
Some £361mln was used to buy investment trust shares in the second quarter, 20% higher than a year ago, and the second-highest quarterly figure on record, with strong net demand of £151mln the second-highest figure ever recorded.
In the first half of this year, roughly £700mln has been spent on closed-ended investment companies, the highest level of purchases ever in a six-month period.
These trusts, many offering capital preservation or inflation protection theme, have tended to dominate the most-bought lists for investment platforms this year.
