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January blues cause investors to shun equity funds as surging coronavirus pandemic prompts tighter curbs around the world

Fund Flow Index - February 2021

The vaccine-induced euphoria that saw equity funds enjoy their second-best month on record in December evaporated in January as contagious new Covid-19 variants prompted surging infection rates around the world. Net inflows fell by 97.5% month-on-month to just £64.6m, no more than a rounding error in the context of busy trading volumes well above average at £21.8bn.

Key highlights from this month's FFI:

  • Equity inflows dried up in January as pandemic surged ahead
  • UK and European equity funds shunned by Covid-shy investors
  • Net equity fund inflows fell by 97.5% month-on-month
  • Traditional active equity funds pummelled, giving up December’s inflows
  • ESG boom continued
  • Index funds escaped the selling, whilst ond funds enjoyed a very strong month