UK investors continued to withdraw their savings from funds in October, however the pace of outflows slowed considerably.
Some £3.7bn was redeemed from UK funds in October, the ninth month of net redemptions this year, according to figures from the Investment Association.
However, this was a drop from the £7.6bn redeemed in September, the second-worst month for funds in the UK.
| Funds Under Management | Net Retail Sales | Net Institutional Sales |
October 2022 | £1.3tn | -£3.7bn | £9.7bn |
October 2021 | £1.6tn | £1.9bn | -£217mn |
Source: Investment Association
Tracker and corporate bond funds were the most popular, with inflows of £1.4bn and £879mn respectively.
Responsible investment funds saw net investment hitting £131mn.
Targeted Absolute Return, UK All Companies and Mixed Asset funds all saw outflows, with investors pulling £914mn, £502mn and £808mn respectively in the month.
Equity funds saw net outflows of £2.3bn and fixed income funds had £335mn withdrawn.
Chris Cummings, chief executive of the Investment Association, said outflows slowed in October as markets settled following the gilt crisis in September, and investors took a wait-and-see approach ahead of the Autumn Statement, which saw an overwhelmingly calm reaction from markets.
“There are pockets of promising news, with investors once again favouring tracker funds, with inflows the second highest so far this year.
“Responsible investment funds, which have seen consistent inflows throughout the year, also moved back to inflows following last month’s outflow.”
Looking ahead to next year, he added, there will hopefully be more stability in markets and inflation come under control following the interventions from central banks.
“However, with an anticipated economic recession in the UK that could last until 2024, the outlook remains challenging for investors.
“As conditions shift, a higher interest rate environment means investing in bonds will become more attractive than it has been over the last decade. Investors will need to navigate the changing investment landscape, and we may see further shifts in the pattern of fund flows.”
sally.hickey@ft.com
