Global funds were the only investments to see positive flows in October as investors continue to shun specific funds and strategies this year, the latest Investment Association data shows.
The global equity, global emerging markets and global bonds sectors made up three of the top five selling sectors in October, with £582m, £223m and £162m net retail sales respectively.
Investors also continue to ditch equities across geographies, pulling £960m out of the asset class last month, following the downward trend of September which saw £333m in outflows. These funds have seen outflows every month in 2016 so far.
Property funds followed equities in terms of outflows, hitting £276m.
UK equities was the region with the largest outflows of £888m, compared to £620m outflows in September. Europe and Japan followed with £367m and £146m losses.
Mixed Asset and Money Market were the joint best-selling asset classes in October with net retail sales of £480m, while fixed income funds bounced back with net retail sales of £359m, up by £274m since September.
Sector-wise, the Targeted Absolute Return was the top seller with net retail sales of £426m.
Tilney Bestinvest managing director Jason Hollands says: “Within equities, retail investors ditched UK equities and instead spent their much depleted pounds on global funds, where the bulk of their exposure will be in expensive dollar assets. A surge in the relative popularity of global emerging market funds during the month – the second best-selling equity sector – could prove ill-timed given Trump’s advocacy of high tariffs on imports from China and other emerging markets.”
The IA data also shows tracker funds increased their overall share of industry funds by almost two percentage points, at 13.2 per cent last month, compared with 11.3 per cent year-on-year.
Tracker funds saw net retail inflows of £233m, dropping slightly from £351m a month ago.
Alastair Wainwright, fund market specialist at the IA says: “Tracker funds continue to be popular with a monthly net retail inflow of £233m. Interestingly the flows for passive strategies mirror that of the active funds market. Equity tracker funds saw an outflow of £154m, whereas fixed income and multi-asset tracker funds received net retail inflows of £190m and £159m respectively.
“Not only did passive sales echo active in terms of asset class but also in terms of equity region, with global tracker funds the only equity region to see positive flows.”
Overall, total net retail fund sales for October were £595m, although down from £664m in September and from £1.7bn in October a year ago.