Property was one of the only asset classes to suffer outflows amid a record month for UK-domiciled funds in November, as a decisive US election and positive vaccine trial data buoyed investor confidence.
In total, the UK funds industry raked in £8.3bn during the month, smashing the previous record of £5.7bn in September 2017, according to the latest Investment Association figures. Equity funds took in £4.1bn, mixed asset brought in £2.3bn and fixed income drew in £1.2bn.
But property funds faced net outflows of £147m in November despite a significant proportion of the Investment Association UK Direct Property sector being suspended.
The final asset class examined by the IA is labelled other and includes sectors such as Specialist, Targeted Absolute Return and Volatility Managed. Those sectors enjoyed £265m net inflows collectively, although fortunes were mixed with Volatility Managed raking in £389m while Targeted Absolute Return shed £118m.
IA chief executive Chris Cummings (pictured) attributed the record month to the coronavirus vaccine breakthrough and a clear outcome in the US election. But Cummings added: “Given the rocky start to 2021 with surging coronavirus cases, it remains to be seen whether investor confidence will continue into the new year.”
L&G fund sees assets drop £500m after its suspension
Within property, the IA UK Direct Property sector shed £166m over the month, while IA Property Other brought in £17m.
The L&G UK Property fund, the largest in the sector, was among the few funds that was reopen to redemptions during the month having lifted its seven-month suspension on 13 October.
Assets in the L&G UK Property fund were £2.3bn at the end of November, according to its latest factsheet, compared to the £2.8bn it held at the end of September, when its previous factsheet was published. In total, assets fell £477.4m in the six weeks after its suspension lifted.
The Threadneedle UK Property Paif was the first suspended fund in the sector to reopen to redemptions, when it did so on 17 September. It faced redemptions of £68m for the remainder of the month, approximately 7% of the assets at reopening, according to Morningstar data.
The Standard Life Investments UK Real Estate and Aberdeen UK Property funds reopened on 16 November.
The Janus Henderson UK Property Paif and Aegon Property Income fund are among the raft of funds holding billions of pounds of assets that are yet to reopen.
