Retail funds record first month of net inflows since April

Fixed income proved a big draw but other asset classes are still getting pummelled


Funds open to UK retail investors attracted £389m, heralding a return to net inflows in November, according to the Investment Association (IA).

It marks the first month to deliver net inflows since April, when £608m was invested. In October, retail investors pulled £3.7bn.

While money flowing into funds is something to celebrate, investor confidence clearly has some way to go before it recovers in light of the £2.5bn of net inflows recorded in November 2021.

Fixed income funds enjoyed net inflows of £1.3bn, a sharp contrast to the £548m that walked out the door the previous month.

IA chief executive Chris Cummings warned that despite the overall inflows the outlook for investors remains challenging, with equities in particular reflecting a mixed picture.

He said: “Fixed income funds dominated inflows; with rising interest rates beginning to cool inflation, at least in the US, bond investors will ultimately benefit from higher rates of fixed interest. Investors favoured corporate bond funds in November.

“Positive inflation data from the US buoyed market expectations that across the pond the green shoots of recovery are emerging. Overall, there are still choppy waters ahead and investors will need to see what the New Year brings,” he added.

With the exception of fixed income and funds categorised as ‘other’, all other asset classes recorded outflows for the month.

Equity investors pulled £486m overall, while the UK was the worst performing region in the asset class with investors retrieving £1.1bn.

Passives continued to prove popular with UK investors as £1.6bn was pumped in to tracker funds across the month.

The best-selling IA sector in November was North America with net retail sales of £1.3bn, while corporate bonds recorded £720m net sales. Meanwhile, the worst-selling sector was UK All Companies, which suffered £976m outflows.

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