UK-company-focused funds posted their worst-ever month of outflows in June, with more than £1bn heading for the exit as investors feared the impact of a bear market.
Data from Calastone, which tracks money entering and leaving funds in the UK from financial advisers, fund supermarkets and wealth managers, shows UK equity funds bled £1.14bn over the month — the 13th consecutive month of investor withdrawals.
Overall, UK equity funds have now haemorrhaged £6.4bn over the past 12 months.
“Signs of optimism are scarce as the bear market shreds investor sentiment,” said Edward Glyn, head of global markets at Calastone. “UK stocks are however not in bear territory, yet investors are selling out of UK-focused funds more heavily than any other category.”
READ Hedge fund adviser Patrick Ghali on crypto, ESG and clients dumping ‘any exposure to China’
“This reflects the home-market bias in UK investor portfolios. A reduction in appetite to hold equities will inevitably hit UK-focused funds harder.”
Glyn said there might be some “bottom-fishing going on”, with some investors switching out of recently outperforming UK equities to funds focused on hard-hit North American companies, given they showed evidence of buying activity in June.
Globally, equity funds shed £1.06bn during the month. Those with a global, European, emerging markets, technology and smaller companies focus all took a hit.
June was also another weak period for passive funds,…
