Fixed income was the only asset class to experience net inflows during July this year, according to the latest Morningstar UK Fund Flows report published today (15 August), with funds including Schroder Diversified Growth and iShares Environment & Low Carbon Tilt Real Estate Index suffering notable redemptions.
According to the report, fixed income funds saw inflows of £698m during the month, having gathered £2.9bn of assets year to date. This is a 0.4% increase since the start of 2023, given total assets under management in the asset class stand at £196bn. In contrast, equity funds suffered outflows of £1.3bn in July alone, taking year-to-date outflows to £3bn – a 0.4% fall in AUM to £781bn. Even money market funds lost £26m in assets, despite still seeing net inflows of £73m so far this year. This takes total AUM to £26bn and marks a 0.3% uptick during the first half of the year.
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Elsewhere, alternative funds have suffered a substantial 10.1% (£913m) fall in AUM to £9bn year to date, having experienced outflows of £284m in July alone. ‘Allocation’ funds’ AUM has fallen by 1.8% year to date to £267bn, while property funds experienced a 4.9% drop in AUM to £10bn. Both asset classes saw respective outflows of £1.3bn and £81m in July.
Sectors and active/passive
Overall, passive funds enjoyed inflows of £544m for the month, taking total assets to £366bn (a 0.1% increase), while active funds saw redemptions of £4.4bn, taking total assets to £825bn (a fall of 0.5%). Morningstar categories to experience the biggest inflows included Global Corporate Bond – GBP Hedged (£546m), GBP Government Bond (£279m) and Global Equity Income (£256m).
Other categories to experience redemptions in July include GBP Flexible Allocation at £1bn, Property – Indirect Global at £509m, UK Equity Income at £368m and UK Large-Cap Equity at £220m.
Funds
The fund to have proportionately suffered the biggest loss of assets was Johanna Kyrklund and Remi Olu-Pitan’s Schroder Diversified Growth mandate, which shrunk by £633m in July alone, and by £724m year to date, to £1.8bn. These mark respective falls of 35.2% and 40.2%.
See also: IA funds attract £6bn inflows in 2023 despite June redemptions
Elsewhere, iShares Environment & Low Carbon Tilt Real Estate Index fell in AUM by £485m (8.4%) in July alone, but by £227m (3.9%) for the year overall, to £5.8bn.
In contrast, the fund to have achieved the biggest inflows in July was the HL Global Corporate Bond Fund, which launched last month and is now £529m (although the amount with which the fund was seeded is unknown).
Despite launching back in 2020, the Royal London Global Equity Income Fund saw its assets grow from just £34m at the end of 2022, to £559m at the end of July. It experienced inflows of £302m over the last month alone.
