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Private investors swing towards UK focused funds, but intitutions less confident

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UK private investors have started to put more money into UK focused funds after six months of outflows, while positive trends for global funds and those with an ESG tilt continued.

In the first quarter of 2021, there was roughly £10bn of net inflows into retail funds, according to the Investment Association (IA).

Global funds were the best-selling sector in March and February, with £1.6bn following £1bn of net retail inflows respectively, making it £3.6bn for the quarter.

With the UK’s vaccine roll out being among the most advanced in the world, confidence returned to UK stocks in March, with £217mln invested by private savers into smaller UK companies and £472mln into funds in the UK All Companies sector, which typically invests in medium to large companies listed on the FTSE.

This was the first such inflow in six months, said IA chief executive Chris Cummings.

“The beginning of spring saw the thawing of investor sentiment towards UK companies following the successful rollout of the coronavirus vaccine and broader growth in business confidence,” he said.

March saw £4.4bn of net retail inflow into funds compared to £2.4bn in Feburary, with net institutional outflows of £1.3bn following £2.2bn outflows the month before.

Responsible investment funds also saw a net retail inflow of £1.6bn in March 2021, a new monthly record.

Following continued strong sales in 2021 and net retail inflows of £10bn for the whole of 2020 and £3.2bn in 2019, total funds under management for responsible investment funds stood at £66bn as of the end of March, with an overall share of industry FUM of 4.5%.

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