UK stock fund outlows remain high at £919m

Outflows from UK stock funds remained high at £919 million for July, according to the latest data published by the Investment Association (IA).

However, the July outflow figure for UK equity funds was the lowest for 2024 to date.

The IA said that, overall, UK savers invested £1.3 billion into funds in July.

“Whilst cautious optimism persists among investors, in a second consecutive month of inflows of over £1 billion, higher flows to fixed income funds suggest that investors remain risk conscious,” said the IA.

Index tracker funds dominated inflows in July, with net retail sales of £3.4 billion, and conversely a £2.1 billion outflow from actively managed funds.

Inflows to index trackers were highest among equity funds at £2.3 billion, while fixed income index trackers also recorded inflows of £895 million.

Fixed income funds returned to inflow with net retail sales of £444 million. This follows two months of outflow of £318 million and £1.2 billion in May and June respectively. Investors favoured corporate and government debt in July, with £404 million to Corporate Bond funds and £223 million to Government Bond funds.

Overall, investors pulled £113 million from equity funds in July, following £1.2 billion of inflow in June.

“June’s record inflow to European equities (£884 million) gave way to more modest inflows of £117 million in July, while we also saw a second month of outflows from North American equities,” said the IA.

“UK equity outflows remained high at £919 million for July, however it’s worth noting that the outflow figure was the lowest for 2024 to date.”

Money market funds were the top selling asset class in July with inflows of £844 million, though this was down from £1.2 billion in June. Short Term Money Market was the top selling IA sector for the third consecutive month, seeing inflows of £806 million building on £1.5 billion in June.

Responsible investment funds saw sustained outflows as investors withdrew a net £368 million in July, a slight increase on £343 million in June.

The IA added; “A £1.3 billion inflow in July is the second consecutive month of inflows at over £1 billion, with flows dominated by investment into index trackers. At £3.4 billion, this is the second highest monthly inflow to trackers ever recorded and comes after a record inflow in April 2024 (£3.8 billion) when ISA season boosted overall flows.

“Although we saw an outflow from equities overall, inflows to equity index trackers were £2.3 billion as investors opted for low-cost access to equity markets. Global trackers saw high inflows of £851 million. Additionally, although there was an outflow from North American equities overall in July (£179 million) inflows to trackers reached £465 million.

“Similarly, despite outflows from the UK All Companies sector, there was a second month of inflows to UK All Companies trackers (£83 million), with savers dipping a toe back into UK equities through low-cost indexing options.”