New research from the Investment Association (IA) shows that £8 billion has been removed from UK equity funds since the Brexit vote.
The FTSE 100 has hit a record high recently, however UK focused funds continue to lose popularity with investors.
UK All Companies and UK Equity Income funds saw decreases in investment of £5.8 billion and £1.8 billion respectively.
Laura Suter of AJ Bell says that:
" Investors tentatively moved back into the UK Equity Income sector in April, but UK stock market funds overall still saw outflows of £142m in the period."
"fears of escalating trade wars, ongoing tensions with North Korea and rising interest rates have not deterred investors from the US, or global markets, which together saw more than £1 billion of the equity inflows".
UK funds have experienced outflows at the same time that global funds have seen inflows, illustrating the gulf in attractiveness between the two fund types. Rathbone Global Opportunities is one example of a fund manager that is moving investments away from the UK market. According to a survey run by Merrill Lynch earlier in the year, 42% of fund managers are underweight in the UK.
Continuing Brexit uncertainty continues to cast a shadow over the investment landscape so things may not improve within the short term.
A strong showing over the past year for UK funds, especially those that focus upon smaller companies however, is one bright spot.
Have you ensured that your investments are the most appropriate for you and are properly diversified? Your financial adviser can ensure that you are in the right investments in order to achieve your goals.
The value of investments and income from them may go down as well as up and you may not get back the original amount invested.
Information is based on our current understanding of taxation legislation and regulations which is subject to change.
Past performance is not a reliable indicator of future performance.
stock £8 billion of investors’ money has flown out of UK funds since Brexit