UK funds suffer £38bn outflows in lead up to Brexit

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Net outflows across IA sectors have totalled £38bn in the 12 months leading up to Brexit, according to Thomson Reuters Lipper analysis.

The Sterling Strategic Bond sector was the worst hit proportional to its size, the data found, experiencing £12bn of outflows, without a single month of inflows.

The largest IA sector, the UK All Companies, which accounts for 12 per cent of assets, experienced net outflows of £9.2bn, with just one month of inflows in July 2015.

Targeted Absolute Return has been the largest success over the period collecting nearly £10bn of net inflows. This is despite the fact that the average fund in the sector returned negative 0.6 per cent.

Only three other sectors experienced more than £1bn of net inflows over the period: property, global equity income and global bonds.

The Brexit issue came to the fore when the Conservative Party landed a majority in last year’s May elections. The party had promised to hold a referendum on the UK’s membership of the EU before the end of 2017 if re-elected.

However, IA sectors suffered the largest outflows in January, a month before prime minister David Cameron set the 23 June date for the referendum.

In January Markets suffered one of their worst starts to the year in decades, with the blame falling largely on volatility in China and falling oil prices.