Fund exodus slows as UK retail investors pull £129m in July
An exodus of UK retail investors slowed in July as just £129m was pulled out of funds by cautious punters, a sharp decrease from £4.5bn in June, according to new industry figures.
Investors have been fleeing funds this year to shield themselves from extreme turbulence that has rocked markets amid soaring inflation and the fallout of war in Ukraine.
July marked the sixth consecutive month of net retail outflows this year as equity funds were hit by outflows of £1.6bn, data from the industry body the Investment Association showed.
Investors added £893m to fixed income funds however, while tracker funds which follow a broad market index or segment, notched inflows of £924m.
Investment Association boss Chris Cummings said the exodus had slowed but the outlook remained uncertain.
“The significant outflows we saw in June softened in July, with fixed income funds returning to inflows this month. While we saw some improvement in July, the overall outlook remains uncertain, illustrated by the recent surge in UK government bond yields,” he said.
“Equity funds continue to face challenges in the current market environment as the major central banks prepare for a further round of rate rises to combat inflation.”
He added that investors were being forced to reconsider investing this year as a cost of living crunch squeezed living standards.