Investors Dump Funds In Face Of Uncertainty – Investment Association Data

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Investors’ response to inflation, tightening monetary policy in major markets and Russia’s invasion of Ukraine saw the third consecutive month of outflows from retail funds, up from £2.5 billion in February to £3.4 billion in March, according to data published today by the Investment Association (IA).

Other key findings for March 2022 include:

  • Fixed Income funds saw outflows of £3.3 billion, as persistently high inflation and tightening monetary policy threatened to undermine investors’ returns.
  • European Equity funds saw outflows of £505 million, up from £142 in February, reflecting the region’s economic exposure to Russia’s invasion of Ukraine.
  • Mixed Investment 40-85% Shares was the bestselling IA sector in March with inflows of £579 million, as savers sought diversified investments amidst market volatility ahead of April’s ISA allowance deadline.
  • Responsible Investment funds saw their strongest monthly inflows so far in 2022, accelerating from £670 million in February to £935 million in March.

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Investors Dump Funds In Face Of Uncertainty

Emma Wall,  Head of Investment Analysis and Research, Hargreaves Lansdown, said:

“It is not a surprise to see fund flows turn negative in March, as the war in Ukraine dominated the headlines and inflation hit record highs. The market reaction to the devastation in Eastern Europe was extreme volatility, and while many investors took the opportunity to take speculative bets, many chose to take their money off the table and turn to the perceived safe havens of cash and gold. HL clients have also turned to multi-asset funds which prioritise capital preservation, outsourcing asset allocation in the face of market uncertainty. It is worth noting however that April flows data has been more positive – at least amongst HL clients. We have seen inflows over the past month, particularly into broad-based active and passive equity funds, such as Rathbones Global Opportunities and FTSE All World ETFs. The IA data also shows responsible funds have bounced back in popularity in March, and recent fund flows on the HL platform show this too, particularly into clean energy funds, investment trusts and ETFs.”

Data from HL’s platform

Top funds, April (net buys, alphabetical)

Baillie Gifford American
Baillie Gifford Managed
Fundsmith Equity
IFSL Marlborough UK Micro-Cap Growth
JPMorgan Emerging Markets
LF Lindsell Train UK Equity
Lindsell Train Global Equity - Distributing
Rathbone Global Opportunities
Schroder Managed Balanced
Troy Trojan (Class X)

Top ETFs, April (net buys, alphabetical)

iShares II plc Global Clean Energy UCITS ETF (Dist)
iShares III plc Core MSCI World (Acc)
iShares Physical Metals plc Physical Gold ETC
iShares plc Core FTSE 100 UCITS ETF (Dist)
Vanguard Funds Plc FTSE All World High Dividend Yield UCITS ETF
Vanguard Funds plc FTSE All-World UCITS ETF (USD) Accumulating
Vanguard Funds plc FTSE All-World UCITS ETF (USD) Distributing - GBP
Vanguard Funds plc S&P 500 UCITS ETF USD ACC (GBP)
Vanguard Funds plc S&P 500 UCITS ETF USD(GBP)

Top investment trusts, April (net buys, alphabetical)

BlackRock World Mining Trust plc Ordinary 5p
Capital Gearing Trust plc Ordinary 25p Shares
City Of London Investment Trust Ordinary 25p Shares
Edinburgh Worldwide Investment Trust Ordinary 1p
Gore Street Energy Storage Fund plc Ordinary Shares
Greencoat UK Wind plc Ordinary 1p
Monks Investment Trust plc Ordinary 5p
Ruffer Investment Co Ltd Red Ptg Preference Shares
Scottish Mortgage Investment Trust plc Ordinary Shares 5p
Witan Investment Trust plc ORD GBP0.05

About Hargreaves Lansdown

Almost 1.7 million clients trust us with £141.2 billion (as at 31 December 2021), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.