Property fund outflows slow as investors seek safe havens
Property funds had their best performance since September 2018 as net outflows decreased to just £18m last month, down from £80m in January.
In the final week of February, when global markets slumped as a result of the coronavirus outbreak, investors bought a net £24.6m of real estate funds according to Calastone’s Fund Flows Index.
It is a marked contrast to equity funds which saw outflows of £1.55bn in the last week of February because of the coronavirus-related market slump.
The reduction in outflows in property funds was caused by an increase in buying activity as selling activity remained close to the 16-month low experienced in January.
Sign up to City PM’s Midday Update newsletter, delivered to your inbox every lunchtime
Although investor sentiment turned more positive in the last five days of trading, February nevertheless represented the seventeenth consecutive month of outflows. It takes the total shed by the sector to £2.9bn over the period.
Edward Glyn, Calastone’s head of global markets, said: “Property funds, pummelled by record outflows in the last couple of years, are benefitting from a perceived safe-haven status in the face of stock market convulsions unmatched since the financial crisis over a decade ago.”
“Sentiment is extremely fragile however, and it may be too soon for property fund managers to hope that March breaks the unprecedented run of outflows.”
“Even so, a week of inflows was a big psychological boost for fund managers.”