Investors pour £295m into UK funds in July

Investors poured £295 million into funds investing in UK companies in July in the second consecutive month of inflows to the UK All Companies sector.

That’s according to July data published by the UK’s Investment Association (IA).

In equity funds, the IA said global was the best-selling equity fund region in July 2021, with net retail sales of £1.2 billion.

After two months of outflows, UK equity funds were second in July, seeing net retail inflows of £245 million.

“The FTSE All-Share rallied towards the end of the month and the outlook for dividend payments continues to strengthen, which may be contributing to more positive investor sentiment towards UK shares,” said the IA.

“The FTSE All-Share total return year-to-date is 11.68%.”

The other key findings for July include:

  • Net retail sales remained strong in July at £4.8 billion, slightly up on June’s inflow of £4.4 billion. Net retail sales to equities were the highest of any asset class at £1.7 billion for the second consecutive month.
  • Tracker fund sales remained healthy at £1.7 billion.
  • Responsible investment funds saw inflows of £1.4 billion, the sixth month in 2021 where inflows have topped £1 billion.

Investment Association CEO Chris Cummings said: “Typically we experience quieter months for net retail sales over the summer period, but this year we have seen consistent and robust inflows through June and July, which speaks to investor confidence being maintained and no rush to spend the savings accumulated during the crisis.

“We are still early on in the inflation story and have not yet seen any moves away from persistent low interest rates, which makes cash saving less attractive and has potentially helped fund flows in the near term.

“An improved dividend outlook has helped to further reduce outflows from the UK Equity Income sector after a sustained period of outflows.

“In the UK, dividends are not only a source of income but are also an important driver of returns and it is encouraging to see another inflow of £295 million to the UK All Companies sector.”

The IA represents the UK investment management sector. Its 250 members manage £8.5 trillion of assets.