The Investment Association reported an outflow of £137m in investor funds through October, a significant levelling from the £1.5bn outflow in the month of September.
Money market funds emerged as the saviour for the month, experiencing £938m in inflows while equity funds lost £376m, fixed incomed dropped £439m, and tracker funds bled £331m. UK all companies was the worst performing sector of the month, losing £939m.
Chris Cummings, chief executive of the IA, said: “While we saw a smaller outflow in October following September’s £1.5bn outflow, it remains a challenging environment for investors.
“Short term money market was the best-selling sector, with investors parking their savings and taking a ‘wait-and-see’ approach as the cost-of-living crisis continues the impact the ability to invest.”
In total, the short term money market received sales of £650m, almost triple the amount of the next investment association sector.
Behind it, volatility managed came up with £268m and Japan produced £229m in inflows. Japan was also the regional champion, followed by North America with inflows, while all other regions experienced outflows. The UK sank to the bottom, with £1.3bn in outflows.
“We may see savers re-allocate their funds once market conditions have calmed down,” Cummings said.
“However, in the meantime, investors are gravitating towards safer asset classes, and UK Gilts and other Government Bond funds were selling well in October.”
Responsible investment funds, which represent 6.8% of all funds under management, lost £530m in the month of October, leaving a total of £92bn.
In total, funds under management match the £1.35trn mark from a year ago in October 2022, and remain steadier than the £3.9bn in outflows seen in October last year.
While net institutional sales continue to fall, dropping £4.3bn on the month, this more than halved from October 2022’s outflow of £9.8bn.