A strong recovery in global markets during November tempted UK investors back into equity and bond funds for the first time in months. Confidence is fragile, however, so buying was selective, and investors favoured safe-haven money markets over both equities and bonds.
Key highlights from this month's FFI:
- Equity funds saw £449m of inflows in November, following six months of net selling
- Investors were selective – emerging market funds saw record inflows, and North American, global and Japanese funds all enjoyed investor buying, but Asia-Pacific, Europe, UK, income funds and infrastructure all suffered outflows
- ESG equity fund outflows reached seven consecutive months in November (£524m)
- Falling bond yields prompted modest inflows to fixed income funds for the first time in four months
- Record outflows from mixed asset funds in November – correlated bond and stock markets make investors question their value
- Yet investors remain cautious – ultra-low risk money market funds saw the most inflows in November, and 2023 has seen them absorb more new cash than the previous eight years combined