UK fund flows record second positive month of 2022 in November
Update
UK fund flows reached £389m in November 2022, the second month of positive flows for the year, according to data from the Investment Association (IA). The only other month of net retail inflows was April, which saw a net £608m entering funds during ISA season.
Even after a strong month, funds under management remained below their November 2021 level, at £1.4trn compared with £1.6trn a year before. Equity funds saw outflows of £386m, driven largely by outflows from Europe and UK funds, with withdrawals of £834m and £1.1bn respectively.
Meanwhile, North American funds saw strong inflows of £1.3bn, while Asian funds experienced inflows of £83m. Global funds saw £58m of inflows and Japanese funds saw £26m in outflows. The UK was also the worst-performing IA sector overall, with UK All Companies seeing outflows of £976m, while North America saw retail net sales of £1.3bn.
Fixed income took the top spot by asset class, as flows returned to £1.3bn, compared with outflows of £548m the previous month. This was driven by corporate bond flows at £720m and sterling corporate bond flows at £328, the second and third-best IA sectors for the month.
The only other positive asset class was Other funds, which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors. It saw £329m in outflows.
Property funds experienced £62m in outflows, Mixed Asset funds saw £217m in outflows, and Money Market funds £508m in outflows.
Tracker funds reached their highest levels for the year in November, with £1.6bn in inflows bringing the sector’s funds under management to £289bn or 20.8% of all industry funds under management.
Responsible funds fared worse, recording net outflows of £153m, leaving the sector’s funds under management at £92bn or 6.6% of total industry funds under management.
IA chief executive Chris Cummings said ‘Fixed income funds dominated inflows. With rising interest rates beginning to cool inflation, at least in the US, bond investors will ultimately benefit from higher rates of fixed interest. Investors favoured corporate bond funds. Positive inflation data from the US buoyed market expectations that the green shoots of recovery are emerging. Overall, there are still choppy waters ahead, and investors will need to see what the new year brings.’
Link: https://www.investmentweek.co.uk/news/4062477/uk-fund-flows-record-positive-2022-november