Retail fund investors pulled £236m from UK equity funds and a further £453m from European funds in February as stock markets in both geographies rallied, according to the latest Investment Association figures.
Global equity markets have delivered high single digit returns in Q1 with the FTSE 100 rising 9.5% and the Euro Stoxx rising 7.7%, according to FE Analytics. In February, the two indices both returned 1.5%.
In total, investors have sold £11.5bn from UK equity funds since the Brexit vote, according to figures compiled by AJ Bell. Over the same period, the FTSE 100 has returned 28.2% and the FTSE 250 has risen 27.9%. The Euro Stoxx has rallied even further rising 36.3% between 24 June 2016 and the end of February.
Savers seek funds to weather uncertainty
In contrast to European markets, including the UK, the IA Global sector attracted the most money with £513m net sales.
IA chief executive Chris Cummings (pictured) said investors sought funds to “weather the ongoing economic and political uncertainty” with Mixed Asset also popular with £206m inflows. Global Bonds was the second most favoured sector with net retail sales of £345m.
Asia Pacific ex Japan and Global Emerging Markets rounded out the top five sectors for the month, attracting £155m and £153m respectively.
“The scale of investor nervousness about markets is highlighted when you compare net retail sales for last February, of £1bn, with the fact that a net £156m was withdrawn from funds this February,” said AJ Bell personal finance analyst Laura Suter.
However, Suter said fund managers should get some solace ahead of Isa season from the fact outflows were than in January.
Stocks rally in Q1
Cautious investor sentiment comes as stock markets rallied in the first three months of 2019.
Major equity indices performance in Q1 2019
| Index | Performance |
| FTSE 100 | 9.49 |
| FTSE 250 | 9.75 |
| Euro Stoxx | 7.72 |
| MSCI AC World | 9.64 |
| MSCI Emerging Markets | 7.41 |
Source: FE Analytics
