UK fund flows record second positive month of 2022 in November

The only other month of net retail inflows in 2022 was April, which saw a net £608m enter the funds during ISA season.

Even after a strong month, funds under management remain below their level of November 2021, at £1.4trn compared to £1.6trn a year before.

Equity funds saw outflows of £386m, which was driven largely by outflows from Europe and UK funds, recording withdrawals of £834m and £1.1bn respectively.

Meanwhile, North American funds saw strong inflows of £1.3bn, while Asian funds experienced inflows of £83m, Global funds saw £58m of inflows and Japanese funds saw £26m in outflows.

The UK was also the worst performing IA sector overall, with UK All Companies seeing outflows of £976m, while North America saw retail net sales of £1.3bn.

Fixed income took the top spot by asset class as flows returned to £1.3bn, compared to outflows of £548m the previous month. This was driven by corporate bond flows at £720m and sterling corporate bond flows at £328, which were the second and third best IA sectors for the month.

The only other positive asset class was ‘Other funds’, which includes the Targeted Absolute Return, Volatility Managed and Unclassified sectors, and saw £329m in outflows.

Meanwhile, Property funds saw £62m in outflows, Mixed Asset funds saw £217m in outflows and Money Market funds experienced £508m in outflows.

Tracker funds reached their highest levels for the year, with £1.6bn in inflows in November, bringing the sector’s funds under management to £289bn, or 20.8% of all industry funds under management.

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Responsible funds fared worse, recording net outflows of £153m, leaving the sector’s funds under management at £92bn, or 6.6% of total industry funds under management.

Chris Cummings, chief executive of the IA, said: “Fixed income funds dominated inflows; with rising interest rates beginning to cool inflation, at least in the US, bond investors will ultimately benefit from higher rates of fixed interest. Investors favoured corporate bond funds in November.

“Positive inflation data from the US buoyed market expectations that across the pond, the green shoots of recovery are emerging. Overall, there are still choppy waters ahead and investors will need to see what the New Year brings.”


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