The retail fund industry saw a further £2.1bn pulled out during November thanks to the uncertainty in markets caused by the ongoing US-China trade spat, according to most recent data from asset manager trade body the Investment Association.
The withdrawal of cash followed outflows also of £2.1bn from retail funds during October, the largest outflow since the EU referendum of June 2016, as the below chart shows.
Net retail sales 2012-2018
Source: Investment Association
November’s figures put net sales for the year at just over £9bn with one month’s worth of data remaining, well below 2017’s record inflows of £48.5bn.
Outflows were fuelled by a second month of withdrawals from fixed income strategies with £1.2bn exiting the asset class after £1.7bn was pulled out in October.
Indeed, industry funds under management fell to their lowest level since March to just under £1.2trn, down from a peak of £1.26trn.
Equities also saw an increase in outflows with £467m leaving strategies compared with £137m during the prior month. A further £230m in outflows was recorded by money market funds.
Sales of mixed asset funds also fell from £504m in October to £350m in November.
On a geographic basis, global funds were the best-selling equities region in November attracting net retail sales of £140m, followed by North America, Japan and Asia with net inflows of £88m, £80m and £53m respectively.
The most shunned geography in November was Europe with net outflows of £426m, followed by the UK which lost £319m.
On a sector level, the IA Targeted Absolute Return was hit hardest in November with outflows of £756m and was worst selling sector for a second month running.
It was joined at the bottom by IA Sterling Strategic Bond and IA Sterling Corporate Bond sectors with outflows of £563.9m and £281.6m.
The IA UK All Companies sector recorded outflows for the 20th consecutive month as investors withdrew a further £270m. In 2018 to November, the sector was hit with £12.8bn in outflows.
Significant outflows were also recorded in IA Europe Excluding UK (£267.9m), IA Mixed Investment 20-60% Shares (£164.7m), IA Global Bonds (£156.2m), IA Short Term Money Mark (£148m) and IA European Smaller Companies (£110m).
Outflows for the IA Mixed Investment 20-60% Shares were the first for the sector since May 2016.
The most popular peer group in November was the IA Mixed Investment 40-85% Shares sector which recorded a net inflow of £215.8m. Other top sectors included IA North America and IA Volatility Managed with respective sales of £104.5m and £104.3m.
Net retail sales by asset classes over 1yr
Source: Investment Association
Chris Cummings, chief executive of the Investment Association, said: “Global uncertainty has led to a doubling-down of investor caution in November.
“A combination of international trade tensions, ongoing Brexit uncertainty and the market volatility seen from October onwards have clearly dented confidence.”
Tracker fund sales increased during November rising from £554m in October to £777m in November, while flows into ethical funds slowed slightly from £91m to £83m, month-on-month.