Referendum uncertainty triggered £3.5bn net outflow

Added 2nd August 2016

The uncertainty stemming from the United Kingdom’s referendum on European Union membership was the main driver of a £3.5bn ($4.6bn, €4.1bn) net outflow from UK asset managers in June, according to the Investment Association.

Referendum uncertainty triggered £3.5bn net outflow

Guy Sears

The monthly report said equity funds saw most of the outflow with the £2.8bn redeemed accounting for a 0.51% fall.

UK equity funds accounted for £1bn of this, followed by European equity funds which had an outflow of £813m and global equity funds with an outflow of £386m.

Asian equity funds had outflows of £191m, North American had £186m leaving, and Japanese equity funds saw the lowest outflow at £131m.

It was property that was hardest hit relative to the total size of the asset class, with outflows of £1.4bn meaning a 5.7% drop.  Mixed Asset funds also recorded a relatively small outflow of £191m.

Despite this, total funds under management rose to £948bn at the end of June.

Debt gains

This situation was helped by fixed income funds receiving a net retail inflow of £258m, the fourth consecutive month of positive retail flows, and money market funds posting net retail sales of £157m.

The IA’s interim chief executive Guy Sears said: "The retail outflow in June occurred in the context of record levels of funds under management, and represented just 0.37% of total assets during a period of intense market volatility. Clearly, Brexit has been unsettling, with property and equity funds particularly affected following earlier outflows during 2016. At the same time, flows were positive into fixed income and targeted absolute return sectors as investors sought safer harbours.

"In the first six months of this year, industry funds under management grew by £22.6bn,” Sears continued. “Fixed income funds saw the largest growth in funds under management in the year to the end of June with £13bn. Funds under management in mixed asset funds increased by £5.2bn and equity funds grew by £1.4bn." 

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Alex Sebastian

News editor

Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.

Features

US equities: If you can’t beat them, join them

US equities: If you can’t beat them, join them...

European investors have been dismissing US equities as too expensive for a couple of years. But as the S&P 500 continues to outperform other equity markets, appetite for the asset class is again on the...

Directories

Ashburton International
Ashburton International

Ashburton Investments is a new generation investment...

Tweets

Events

Future Advisory Forum Hong Kong 2016
Future Advisory Forum Hong Kong 2016

Tuesday 4th October 2016

Hong Kong

Future Advisory Forum Singapore 2016
Future Advisory Forum Singapore 2016

Thursday 6th October 2016

Singapore

Offshore Bond Workshop Manchester 2016
Offshore Bond Workshop Manchester 2016

12th October 2016
The Midland, Manchester

Future Advisory Forum Cape Town 2016
Future Advisory Forum Cape Town 2016

Tuesday 18th October
The Vineyard, Cape Town

Investment Strategy

Sponsored Content

OTHER STORIES FROM LAST WORD...