UK investors pulled a record £10bn from retail funds in March as they reacted to lockdown measures resulting from the coronavirus pandemic, according to figures from the Investment Association (IA).
Fixed income funds were the worst affected with a whopping £7.4bn in net outflows as investors looked to rebalance their portfolios and seek safety in cash.
After fixed income, one of the hardest-hit sectors was absolute return funds, which had their worst month in recent history with £1.8bn of outflows marking 21 consecutive months of withdrawals. Over two years the sector has shrunk by 30% in terms of assets as investors throw in the towel.
Around £1.1bn was pulled from equity funds, with investors generally avoiding taking money out at low valuations, although UK retail funds saw net sales of £747m while global funds saw net outflows of £1.3bn.
Tracker funds saw inflows of $467m, taking the total amount under management to £199bn or 17.8% of industry funds. Responsible investment funds also continued to gain favour, with net retail sales of £113m in March, reaching £25bn or 2.3% of funds under management.
APRIL REBOUND
However, figures from fund settlement company Calastone show retail investors put £2.6bn back into equity funds last month - the most since 2015 - as markets rallied on co-ordinated global stimulus measures.
Among the most popular funds were those investing in technology, such as the €6bn Fidelity Global Technology Fund (BJVDZ16) and the $4bn Polar Capital Global Technology Fund (B42W4J8).
One of the biggest beneficiaries was Terry Smith’s £18bn Fundsmith Equity fund (B4Q5X52), which saw £408m of inflows, the largest amount since it launched nearly a decade ago.
Similarly, funds managed by Lindsell Train saw significant inflows, with the £7bn Lindsell Train Global Equity Fund (B3NS4D2) seeing inflows of £107m, although this wasn’t enough to offset March’s outflows of £377m as global funds fell from favour.
The Lindsell Train UK Equity Fund (B18B9X7) attracted £124m of inflows in April as investors continued to back the prospect of a rebound in UK stocks.
