Investors ran scared in August selling down both equity and fixed income fund holdings, according to the latest Fund Flow Index from Calastone, the largest global funds network. Outflows from equity funds reached their highest level since September 2022, while fixed income funds suffered their first outflows since June last year. Property and mixed asset funds were also hit with further net selling. Meanwhile, investors added near-record capital to safe-haven money market funds that are offering the best income since before the Global Financial Crisis.
Key highlights from this month's FFI:
- Equity funds collectively shed £1.19bn in August – worst since September 2022 and 7th worst month on record
- UK-focused funds hardest hit, but US funds, income funds, European, Asian, country and sector funds all suffered outflows too
- ESG boom ends – ESG equity funds saw record outflows of £953m – fourth consecutive month of outflows
- Investor focus on – global funds intensifies – inflows of £1.18bn in August; emerging markets also saw inflows
- Fixed income outflows: August’s bond market turbulence caused first outflows since June 2022
- Money market funds added £673m – second highest inflows on record as investors bought into high interest rates and safe-haven status