For the third month in a row, the IA UK All Companies and IA UK Equity Income sectors were the two least popular among investors, witnessing net outflows of £213.5m and £86.3m respectively.
There was better news for the UK Smaller Companies, which recorded modest inflows of nearly £10m, but overall UK equities suffered total redemptions of £290m in July, which is slightly below the 12-month average £322m net outflows.
Instead, investors piled into global equity funds in July, with the IA Global sector topping the rankings for the second month with net retail sales of £607m, an increase from the £465m recorded in June.
July also saw increased demand for corporate bonds, with the IA Sterling Corporate Bond sector climbing from the sixth most popular sector in June to second, with net retail sales jumping from £223m to £432m over the time period.
Multi-asset funds were also popular, with the three Mixed Shares sectors and Targeted Absolute Return all in the top 10 best sellers.
Total net retail sales for July was £3.5bn, which according to the IA is the highest sales for July on record and marks the twelfth consecutive month of positive inflows.
Alastair Wainwright, a fund market specialist at the IA, said: “So far this year, retail investors have invested £23.1bn in UK authorised funds, already surpassing annual net retail sales in both 2015 (£16.9bn) and 2016 (£6.8bn).”
Commenting on the figures, Adrian Lowcock, investment director at Architas, said: “The latest figures show that UK investors continue to remain wary of the home market as Brexit negotiations dominate the headlines. Interestingly the US also showed a slight outflow possibly due to high valuations, lack of confidence in President Trump and rising tensions with North Korea.”
“Income remains a strong theme with corporate bonds and fixed income sectors still popular among UK investors as the interest rate rise expectations have been pushed back once again. The UK economy has slowed this year, while inflation appears to be peaking and Brexit negotiations will continue to hang over the country.”
