View the article online at http://citywire.co.uk/money/article/a983249
Investors pile into US funds after Trump victory
UK investors respond to Donald Trump's presidential victory by piling into US funds, as stock markets across the pond hit all-time highs.
Investors have piled into US funds after Donald Trump's shock victory in the presidential election, as stock markets rally across the pond in anticipation of his tax-cutting, heavy-spending agenda.
US funds enjoyed net inflows from retail investors of £245 million in November, the highest amount since March 2015's £349 million all-time high, according to figures from the Investment Association, with £168 million invested in the North America sector and a record £77 million invested in rallying North American Smaller Companies funds.
The heavy backing of US funds comes as investors have responded bullishly to the prospect of a Trump presidency. Since the vote, the S&P 500 has risen 6% to all-time highs, while an even stronger rally has taken hold on the Russell 2000 index of smaller companies, up 14.7%. With the pound having fallen against the dollar over that period, UK investors have enjoyed even stronger returns.
November also saw investors finally embracing UK funds, which saw their first net inflows for 2016. After a turbulent start to 2016 that saw the FTSE 100 drop as markets were gripped first by fears over China's slowing growth then broader worries over the global economy reflected in a banking sell-off, the stock market's initial plunge following the Brexit vote added to investors' worries.
But since then the index has rallied, propelled in part by the fall in the pound following the European Union referendum that has boosted the value of international earnings.
Investors put aside their worries and invested a net £114 million in UK funds in November, versus a monthly average of £326 million withdrawn over the previous 12 months.
But 'absolute return' funds continued to top the sales charts in November, attracting £366 million of net inflows, having topped the sales charts for nine of the last 12 months.
That's despite a muted performance from the sector, which features funds aiming to deliver a positive return in all market conditions.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Tools from Citywire Money
From the Forums+ Start a new discussion
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.
by Gavin Lumsden on Jan 19, 2017 at 09:54