Fund outflows continue for fourth month as investors remain cautious
Net fund outflows continued in January, becoming fourth consecutive month of losses as investors remained cautious.
Outflows hit £859m in January as investor appetite was dampened by continued Brexit uncertainty and trade tensions.
Read more: Net retail sales plummet as investor confidence knocked by uncertainty
Europe and UK equity funds saw net retail outflows of £450m and £150m respectively while the best performing asset class was mixed-asset with £376m in net retail sales in January.
Investment association chief executive Chris Cummings said: “Dry January extended to the fund markets as savers remained cautious, heralding the fourth consecutive month of net retail outflows.
“The threat of a no-deal Brexit, Eurozone instability, and international trade tensions, combined to dampen investor appetite with savers looking towards Mixed Asset funds to spread their risk.”
Retail sales plummeted by 85 per cent last year, Investment Association statistics published last month showed, due to a “perfect storm of political and economic uncertainty.
Read more: Outflows from UK funds hit highest level since Brexit vote
Brexit, US-China trade tensions, the slide in the Turkish Lira and the Italian budget crisis all impacted investor sentiment in 2018 and saw sales drop to £7.2bn in 2018 in comparison to £48.5bn the previous year.
In the 31 months following the EU referendum UK equity funds experienced outflows of £11.5bn compared to inflows of £5.6bn in the 31 months leading up to the 2016 vote.