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Vaccine news drives huge inflows to equity funds as investor appetite for risk soars

Fund Flow Index - December 2020

The announcement of three safe, effective vaccines against Covid-19 spurred a near-record flood of new capital into equity funds in November. Investors added a net £2.3bn to equity funds, the second highest month of inflows on record after April 2020, when global markets reacted euphorically to the vast economic and financial support packages from governments and central banks.

Key highlights from this month's FFI:

  • November saw second-highest inflow to equity funds on record totalling £2.3bn
  • Daily trading data shows how inflows followed vaccine news
  • US election caused modest outflows
  • Active funds had their best month in half a decade, with record inflows to active global funds
  • ESG equity funds also saw record inflows, with November exceeding total inflows during the five years to January 2020
  • Investor appetite for increased risk drove record redemptions from money market funds