UK investors shun stockmarket rally in favour of interest-bearing assets______

UK investors could not be persuaded to invest in July despite the global stockmarket rally. Instead, they are taking higher share prices as an opportunity to withdraw capital from equity funds, selling a net £983m of their holdings. This was the highest outflow since September 2022 when the government’s mini-budget upset the financial-market apple cart. Furthermore, over the last three months, outflows have totalled £1.95bn, despite global stock markets rising strongly.

Key highlights from this month’s FFI:

  • Investors sold £983m of equity funds in July even as global stock prices continued to climb
  • UK equity funds saw their 26th consecutive month of net outflows while US funds suffered their second-worst month on record
  • ESG funds were hit by largest outflows on record – the third consecutive month of net selling
  • Global equity funds, emerging markets and specialist technology funds bucked the trend and saw inflows
  • Fixed income funds are absorbing cash as investors lock into high yields
  • Strong buying of money market funds reflects even higher short-term rates and need for liquidity

View this latest edition of the FFI

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