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VOLATILE BOND MARKETS DRIVE FLIGHT FROM EQUITY FUNDS

Fund Flow Index - October 2023

Equity funds were hit by a fifth consecutive month of outflows in September as the summer’s volatile bond markets forced a reappraisal of stock valuations. Outflows of £206m from equity funds were, however, the least severe since February this year.

Key highlights from this month's FFI:

  • UK funds hit by largest outflows, but relative to their size
  • US funds are seeing more selling pressure
  • ESG funds suffer 5th consecutive monthly outflows – investors increasingly turning their backs
  • Global funds remain the investor’s favourite, and emerging markets enjoy a moment in the sun
  • Index funds are back in vogue after losing out to active ones in 2021 and 2022
  • Fixed income funds see outflows in September as market volatility hits sentiment
  • Mixed asset funds suffer worst month on record – risk/reward profile is no longer attractive