Political upheaval in the UK and the sharply rising likelihood of a no-deal Brexit caused a dramatic outflow of capital from equity funds in July. UK investors rushed to sell their holdings at their fastest rate since October 2016. A net £1.3bn flowed out of equity funds, on the back of record trading volumes, pushing the FFI: Equity down to just 46.1.
Here are some of the key highlights from this month's FFI:
- Equity funds see £1.3bn of outflows, the largest since October 2016
- UK-equity funds hit hardest, but almost all equity fund categories saw outflows
- Daily trading patterns show selling of UK-equity funds was closely linked to growing rhetoric on no-deal Brexit ahead of the appointment of the UK’s new government
- Active-equity funds saw record outflows
- Lower risk asset types, like fixed income, benefitted from investors’ appetite for lower risk
- Brexit fears spurred sharp increase in flows of capital to offshore funds