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Index funds celebrate record inflows, while active managers suffer record outflows

Fund Flow Index - July 2019

Equity index funds enjoyed record net inflows of capital in the second quarter of 2019. Meanwhile, by contrast, active funds suffered record outflows. Between March and June, a net £2.1bn flowed into index-tracking equity funds, the largest inflow Calastone’s index has ever recorded, compared to £1.9bn that was withdrawn from actively managed funds. 

Here are some of the key highlights from this month's FFI:

  • Equity index-tracking funds see record £2.1bn inflows in Q2, while active funds suffer record £1.9bn outflows
  • Index funds have taken an ever larger share of fund flows in recent years
  • Investors trade their active fund holdings far more than index-trackers – the latter enjoy much steadier buying and very little turnover
  • FFI: Equity Index Tracker was an extremely positive 62.8 (50 is neutral). FFI: Equity Active was 47.2 – below 50 signifies selling.
  • Elsewhere, fixed income saw strong inflows in June, in another sign of falling investor risk appetite, and real estate funds saw a ninth consecutive month of outflows.
  • Equity income funds saw very strong outflows, as competitors were affected by the suspension in May of a high profile fund in the category