Investors withdrew a net £747 million out of their UK-focused equity funds in March, down from an average monthly outflow of £888 million between November and February, according to the latest Fund Flow Index from Calastone, the largest global funds network.

The report said March was the 22nd consecutive month UK funds have suffered outflows.

Edward Glyn, head of global markets at Calastone, said: “Global funds are the largest category of funds under management in the UK.

“They overtook UK equities as the largest sector for UK investors back in December 2020. Since that time, Calastone’s figures show net inflows of £23.0bn to the sector, while UK equities have suffered outflows of £12.1bn.

“This mismatch has enabled global funds to retain the top spot in terms of assets under management, despite having performed significantly worse than UK equities over the last two years.

“The relatively strong performance of UK equities since the bear market began just over a year ago has not improved sentiment.

“If anything, we have seen outflows accelerate, which on the face of it seems surprising.

“Yet the large share of UK-focused funds in investor portfolios makes them an obvious source of cash for those keen to reduce overall equity exposure, while the increasing perception of the London stock market as an investment backwater, along with the political and economic difficulties the country has been facing, have kept the pressure on to rebalance holdings away from UK shares.

“A period of strong performance by UK equities, after years missing out on the global bull market has clearly provided an opportunity to cash out.”