- June saw a net retail outflow of £986 million – the first monthly outflow this year.
- In June, North American equity funds had a £657 million outflow, despite improved performance in the US market. This impacted on sales to tracker funds which dipped to £272 million inflows.
- Japan equity funds saw £227 million invested in June, the only equity region with inflows.
- UK gilts were the top best-selling sector for June.
The Investment Association released their monthly stats today Retails Sales | The Investment Association (theia.org).
High Interest Rates Lead To Investors Pulling Out Funds
“Investors pulled nearly £1bn out of funds in June as the macro-economic picture moved both sentiment and opportunity. Challenging inflation and a mixed domestic growth picture turned investors off stock markets – but also pushed up interest rates, making UK gilts an attractive investment for those searching for yield and capital preservation. Japan bucked the trend, as a rallying market tempted investors to buy the under-valued region.
HL clients were split between caution – money market funds, and opportunistic – technology funds and trusts. This speaks to the narrow set of companies driving performance in the US, where outside of a handful of technology companies, the remainder of the stock market has had a more challenging year.
Since June, when this data was collated, inflation has fallen, though sits stubbornly above Bank of England target, and the Bank has raised interest rates today for the 14th time in a row to 5.25%, predicting higher rates for longer – three years, in fact. If this backdrop persists, equities will struggle and the investor appeal of government debt will remain.”
Top funds, June (net buys, alphabetical)
| abrdn Sterling Money Market |
| Baillie Gifford American |
| Fidelity Index World |
| Legal & General Cash Trust |
| Legal & General Global 100 Index |
| Legal & General Global Technology Index Trust |
| Legal & General International Index Trust |
| Legal & General US Index |
| Rathbone Global Opportunities |
| Royal London Short Term Money Market |
Top investment trusts, June (net buys, alphabetical)
| Allianz Technology Trust plc Ordinary 2.5p |
| AVI Global Trust plc ORD GBP0.02 |
| City Of London Investment Trust Ordinary 25p Shares |
| Greencoat UK Wind plc Ordinary 1p |
| Henderson Far East Income Ltd Ordinary NPV |
| HICL Infrastructure plc ORD GBP0.0001 |
| JPMorgan Global Growth & Income plc Ordinary 5p |
| Merchants Trust plc Ordinary 25p |
| Polar Capital Technology Trust plc Ordinary 25p |
| Scottish American Investment Co plc Ordinary 25p Shares |
Article by Emma Wall, Head of Investment Analysis and Research, Hargreaves Lansdown
