Investors withdrew £53.9bn from UK funds in 2022, the biggest annual outflow ever, according to an analysis by Refinitiv Lipper.
Last year’s outflows, excluding money market funds, comfortably topped the £11.2bn pulled in 2019, the previous record year for outflows. Last year was also the only year in the past two decades that still booked net redemptions with money market funds included.
Money market funds were the only asset class to see inflows, with £12.7bn added, but this was negated by the scale of the outflows.
Equity funds saw the largest outflows, at £34.9bn, with UK equities the hardest hit by some way, with Equity UK, UK Income, and Small and Mid-cap categories recording £23.3bn of outflows. Equity fund redemptions through the depths of the financial crisis in 2007 were just £8.3bn.
Alternatives saw outflows of £12bn, with asset-backed securities funds the worst hit.
Despite heavy losses, bond funds experienced relatively small outflows of £2.6bn, while mixed-assets funds shed £1.2bn.
Sustainable funds fared much better than the broader market, bringing in a total of £27.6bn.
Real estate net assets saw the greatest year-on-year percentage-terms decline, shedding 79.8% of their 2021 values.
The only asset class to see an absolute increase was money market funds, posting a 5.1% increase to account for 15.1% of total net assets.
The combination of UK mutual funds and ETFs booked its first net asset fall since 2018.
A total of £2.01trn was held in UK mutual funds and ETFs at the end of 2022, down from £2.27trn the previous year. Equity funds accounted for £926bn (46%) of this total, down from £1.08trn the previous year. Mixed-assets funds totalled £400bn, followed by bonds at £322bn.
Link: https://www.investmentweek.co.uk/news/4076476/investors-pull-record-gbp54bn-uk-funds