The figure represents a £1.38bn drop on the December 2014 figure, and is the lowest since the market saw net inflows of £98m in August 2012.
The fall was even more drastic in the institutional market, which saw net outflows of £5bn in January.
UK Equity Income topped the best retail sellers list for the eighth straight month, despite dropping by £251m on the previous month. The sector saw net retail sales of £280m followed by Global in second place with £206m.
The best-selling asset class was property with a net total of £235m, though in keeping with the wider trend it also saw a month-on-month decrease of £46m.
The worst-performing was the UK All Companies sector, which experienced net retail outflows of £679m – its biggest decline since September 2014 and the sixth month in the past eight in which it has exhibited the worst sector performance.
Conversely, in terms of funds under management the UK All Companies sector is still more than double its nearest competitor, with £161.1bn against the £78.5bn in global.
Of the £854bn FUM total in January – a £96bn improvement on a year earlier – the Japanese Smaller Companies sector represented the least, accounting for just £300m.
Sterling corporate bonds topped the fixed income category with net retail sales of £192m, up from £74m in December, while at the other end of the table sterling high yield saw outflows of £107m.
Jason Hollands, managing director at Tilney Bestinvest, outlined the importance of investors having a long-term outlook despite the disconcerting January numbers.
He said: “With major developed stock market indices reaching record levels and the FTSE 100 this week surpassing the peak previously seen at the height of the dot com bubble in 1999, investors appear to be nervous about putting new cash into the markets at a time when a number of high-profile businesses have reported earnings setbacks, the UK faces an uncertain outcome from May’s general election and the news headlines have been dominated by a potential Greek exit from the Eurozone, terrorism and the conflict in Ukraine.
“However, it is also important to understand that while equities certainly aren’t at bargain basement prices, the level of the FTSE 100 isn’t a great barometer in itself of whether shares are fair value or expensive. A true comparison with the UK market now and in 1999 should take account of 15 years of inflation. On this basis, adjusting for CPI, we estimate the FTSE 100 Index would currently need to be at around 9,472 points to be comparable with its 1999 peak of 6,930. That’s a long way off where the FTSE 100 is today.
“Of course, none of us has crystal ball to know whether markets will continue to rise in the short term of face a ‘correction’, but it is important not to let your long-term financial plans get blown off course by short-term considerations.”
