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New research by Morningstar, a data provider, shows that funds domiciled in the UK were hit hard by the Brexit unease, losing £5bn in assets in March and £30bn in total over a 12-month period.
Bhavik Parekh, associate analyst for manager research at Morningstar, said: “In the months leading to the deadline, investors and fund [managers] became increasingly worried over the impact of an unfavourable deal and its negative implications.”
The outflows were partly driven by investors culling their exposure to asset classes vulnerable to Brexit shocks, such as UK companies. UK equity income funds — a longstanding investor favourite — bled £3.1bn over the year to the end of March.
Investors’ aversion to UK equity as an asset class was reflected in the fact that two best-selling funds over the period were equity index funds excluding the UK managed by BlackRock and Vanguard. The BlackRock product garnered £1.4bn over the 12 months, while the Vanguard fund pulled in £851m.
Meanwhile, investors preferred cash “to any form of UK market exposure” around the time of the March 29 Brexit deadline, placing £555m into short-term money market funds in March, said Mr Parekh.
Another asset class hit by the Brexit unease was property. Some £2.1bn flowed out of UK property funds over the 12-month period. [...]
Full article on Financial Times (subscription required)