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Rising global risks cause investor flight to safety, but UK equity funds buck the trend

Fund Flow Index - June 2019

In May, bad share prices made relatively little impact on investors, but mainly because buyers have been on strike now for months. Having shunned equity funds for six months in a row, investors showed that they still preferred to sit on the sidelines as share prices fell, just as they had during the market rebound earlier in 2019.

  • Investors remained neutral on equity funds in May, despite global stock market declines, extending a six-month run of sitting on the sidelines
  • Pockets of optimism, such as UK equities, are almost balanced out by pessimism elsewhere, such as European equities
  • Without buying of cheap UK funds, equities would have seen consistent outflows for months
  • Risk aversion rose in May, and investors turned increasingly to bond funds, which saw the fifth highest inflow on record
  • Fund flows offshore abated as Brexit delays extended