UK equities suffered £1.2bn net outflows in March despite investor sentiment warming to the wider asset class.
According to Numis, investors pulled cash at similar levels to January (£1.4bn) and February’s (£1.6bn) figures and are anticipating £4bn net outflows for UK-focused equity strategies in the first quarter of 2023. Last year saw record net outflows from the asset class as investors pulled £12bn.
The average UK equity fund performed at 2% below its benchmark across the month.
UK equity income funds recorded an estimated £100m outflows in March, down from £200m a month prior., while assets under management (AUM) fell £2.1bn to £36.8bn.
Meanwhile, £100m flowed out of UK Smaller Companies strategies, with total AUM in the sector falling to £11.3bn, a £500m decline across the month.
The report follows on from Calastone’s Fund Flows Index March update, which tracks UK investors appetite for different sectors.
According to Calastone, while equity strategies as a whole recorded £960m net inflows in March, £747m flowed from domestic-focused equity funds.
Since December 2020, £23bn has flowed into equities, in stark contrast to UK equity funds, which suffered net outflows of £12.1bn.
Numis also said AUM in explicit UK equity mutual funds dropped 5% against February 2023 to £193bn.
Despite the outflows, UK equity funds’ share of total industry AUM in the retail space registered a single percentage point increase to 17% in March.
See also: Gilts and gold shine amid March banking sector madness
