Mounting fears that the UK is heading for a no-deal Brexit have prompted investors to accelerate their withdrawals from UK active equity and property funds.
Investors have pulled money from active equity and property funds for four consecutive quarters, with the pace of withdrawals picking up in the three months ended September as hopes faded for an agreement between London and Brussels over the UK’s divorce from the EU.
Withdrawals from active equity funds reached £3.5bn in the latest quarter, up from £2.2bn in the three months ended June, according to data from Calastone, the largest global funds transaction network.
Calastone estimates that more than two-thirds of UK fund flows by value pass across its network, which tracks investment flows from financial advisers, platforms and institutions.
Edward Glyn, head of global markets at Calastone, said active equity funds were “firmly out of favour” among UK investors.
“What began as a trickle out of active equity funds late last year swelled to a flood over the summer as investors grew more fearful over the health of the global economy,” he said.
Investors pulled £667m from property funds in the latest quarter, up from £250m in the three months ended June.
Outflows from active equity funds over the past months have reached £6.7bn, while withdrawals from property funds have exceeded £2bn.
“The distaste for UK assets is a very clear response to the ever-intensifying political crisis, especially now that it is accompanied by clear evidence of economic damage,” said Mr Glyn. [...]
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