Lockdown and Brexit brinkmanship punish UK-focused funds______

Surging Covid-19 infection rates and Brexit tensions prompted a flood of outflows from UK-focused equity funds in October. Outflows totalled £358m during the month, making October the fourth-worst month on record for UK-focused equity funds. Along with income funds, they are the only categories now to have seen five consecutive months of outflows. The FFI:UK Equity fell to 45.2, one of its worst-ever readings. Income funds, which are disproportionately invested in UK equities suffered their worst ever month as £763m left the sector. FFI:Equity Income sank to 34.6, meaning that sell orders were roughly double the value of buy orders.

Some key highlights from this month’s FFI:

  • UK-focused equity funds suffer fourth-worst outflows on record
  • Surging infection rates, lockdown and Brexit brinkmanship drive investor distaste for UK assets
  • European equity funds suffered far smaller outflows – just one fifth of the size of the UK-focused funds – despite equally bad news on the pandemic
  • Traditional active funds were punished again, while ESG and index funds proved resilient
  • Bond funds benefited from caution on equities, but property funds suffered big outflows as suspensions lifted

View this edition of the FFI in full

View this edition of the FFI in full

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