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Cash flows back to equity funds at fastest rate since December 2021 as optimism returns

Fund Flow Index - April 2023

UK investors shrugged off concerns over bank failures in the US and Switzerland in March and turned decisively more positive on equity markets. They added a net £960m to their holdings, the best month for equity funds since December 2021. March marked a significant turnaround from outflows seen in January and February. Over the whole of the first quarter, just £199m flowed into equity funds.

Key highlights from this month's FFI:

  • Equity funds enjoy £960m of inflows in March, reversing a run of investor pessimism
  • Global funds scooped most of the new cash, but investors are switching out of UK-focused and European equity funds; emerging markets also saw strong inflows
  • Uptick in confidence benefited passive funds in particular
  • ESG gold rush may have peaked – inflows have fallen sharply
  • Fixed income funds enjoyed a record first quarter with inflows of £2.75bn