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June sees highest ever outflows on record for UK equity funds as investors cash in profits following renewed rally in the stock markets

Fund Flow Index - July 2020

As global stock markets closed their best quarter in at least a decade in Q2, fund flows suggested that investors preferred to bank their gains and take their seats on the sidelines.

Key highlights from this month's FFI:

  • June saw the highest ever outflows from UK equity funds at £679m – the highest ever on record and an all-time high
  • UK equity income funds also saw highest ever outflows on record at £671m
  • June marked the worst ever performance for UK equity fund outflows – outstripping levels during the referendum, Brexit, lead-up to the General Election, and onset of the pandemic
  • As investors bought heavily into the markets in April and early May, June saw them cash in quick on their profits, as the markets delivered their best performance in a decade
  • The same trend was felt for all equity funds – investors added £3.9bn to equity funds between April and the first week of May, the biggest inflow on record in a two-month period
  • But in June, they sold a net £1.2bn, banking profits they have made on the market rebound
  • Active funds took most the impact, though passive funds saw rare outflows too, of £62m – the first month of outflow since October 2016
  • Investors parked their cash in the safer options of fixed income and money market funds