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equity fund flows hit as coronavirus saps confidence

Fund Flow Index - February 2020

Equity fund inflows dropped sharply in January, failing to maintain the momentum generated by a surge of inflows that gave equity funds their best month in two years in December 2019. This edition of the FFI shows that net inflows fell by more than two thirds to £618m in January. Two-fifths of this new capital flowed into UK equity funds, though the inflow to UK equities dropped by three quarters month on month, as the post-election bounce in sentiment faded and coronavirus news began to hit.

Key highlights from this month's FFI:

  • Equity fund inflows fell sharply in January though they remained in positive territory
  • Active funds saw inflows drop nine-tenths, month-on-month
  • Total trading activity in equity funds rose on the back of increased selling
  • Coronavirus outbreak sparked sharp change in sentiment when it hit mid-month, with Asia focussed funds and active equity funds bearing the brunt of the selling
  • Asia focussed funds saw the largest outflow since July 2016
  • Safe-haven assets were relative winners