UK investors pile into US equities in record quarter

Global funds network, Calastone, found US equities were the main driver of UK investor appetite. 

Its Fund Flow Index for March showed investors added £6.97bn to equity funds in the first quarter of 2024. 

While North American funds absorbed a record £5.72bn of UK investor capital in the same period, which is three times the previous best quarter - £1.76bn in Q4 of 2020. 

And UK investors put more into North American equity funds in the past four months than they did in the previous nine years at £6.69bn compared with £6.38bn.

Astonishingly, in the four months since December 2023, UK investors have added more cash to North American equity funds than they have in the previous nine years combined (£6.69bn v £6.38bn).

Edward Glyn, head of global markets at Calastone said: “Global equity markets have surged since the end of October. Japan, the US and Europe have led the charge, all up by more than a quarter and leaving the UK in the dust – the UK’s top 100 has eked out just 8.6 per cent over the same period.

"UK equities are certainly cheap, but investors worry where the growth is going to come from to drive earnings higher. Add a relentless narrative of gloom about the prospects for the London stock market and it’s hard to persuade anyone to hold UK-focused funds.

"Meanwhile the US earnings recession is over – profits are once again on the up and that seems to be the main catalyst driving fund inflows and higher share prices."

Coming in after US equities as most popular were global equity funds, with inflows of £3.30bn in the first quarter and £1.22bn in March alone.

Emerging market equity funds came third in March, with inflows of £362mn. 

Though it did not break any records, there was almost three times the quarterly average going into this area, with £700mn of inflows in the first quarter of 2024. 

tara.o'connor@ft.com

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