UK equity income funds suffer 18th month of outflows

Morningstar’s UK equity income sector was the biggest loser in terms of fund flows in October, haemorrhaging £405.9m.

Woodford shuns Atom rights issue amid £1.3bn redemptions


Investors are turning their backs on the UK equity income sector, which houses some of the biggest retail giants like Neil Woodford’s £8.4bn flagship equity income fund and Mark Barnett’s £10.5bn Invesco Perpetual High Income fund, data from Morningstar has revealed.

The UK equity income sector has recorded net negative flows month-on-month since May 2016, making it more unloved than absolute return, property and US equity sectors, which have all seen their fair share of redemptions this year.

Year-to-date, the UK equity income sector has racked up redemptions totalling £4.6bn, more than double the amount of net flows recorded by Morningstar’s UK equity category (£2.1bn).

Over October, UK domiciled multi-asset funds reigned supreme, bringing in £1.6bn of net flows, following on from a strong September where it took in £1.2bn.

Unsurprisingly, Europe ex UK equity continued to feel the love from investors and was the second strongest performer in terms of net fund flows (£695.1m).

After UK equity income, property,  UK corporate debt, Asia ex Japan, property, global equity income, GEM equity and unconstrained bonds were the least popular asset classes among investors, with UK corporate debt delivering the second worst performance (-£314.8m).