Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a1055469

Terry Smith cleans up as investors snub UK funds

Top-performing Fundsmith Equity fund continues to top the sales charts, as retail fund sales hit a record August high.

 
Terry Smith cleans up as investors snub UK funds
 

Citywire AAA-rated Terry Smith is continuing to top the sales charts as retail fund sales hit £3.6 billion in August, a record high for the month. 

Investors ploughed a net £1.1 billion into equity funds over the month, according to figures from the Investment Association (IA), but continued to shun UK funds, with Europe and global funds attracting the bulk of the money, with sales of £551 million and £459 million respectively.

UK funds have seen net retail outflows of £1.4 billion so far this year as investor confidence in domestic stocks continues to wane. In contrast, non-UK equity funds have attracted £7.9 billion of new money so far this year.

As investors continue to pile into global funds, the top-performing Fundsmith Equity  fund is continuing to hoover up assets. Numis analysis of Morningstar data showed the fund was the biggest seller from the sector over the month, gathering a further £235 million in net assets.

Among the UK funds to register the biggest outflows were the Halifax UK FTSE All-Share tracker fund, Mark Barnett's Invesco Perpetual High Income  fund and Tom Dobell's M&G Recovery fund.

 

Investors also continue to pull money from Standard Life Investments' giant £23 billion Global Absolute Return Strategies (Gars) fund, which was hit by outflows of £147 million over the month.

Gars rival Aviva Investors Multi-Strategy (Aims) was meanwhile among the best sellers, with inflows of £223 million in August.

Funds in the Sterling Strategic Bond sector also continued to grow in popularity, with net retail sales ticking up to £333 million in August, from £306 million in July.

Adrian Lowcock, investment director at Architas, said investors had been more positive on the outlook for the global economy ‘than at any other time since the financial crisis’.

‘A focus on the fundamentals has been lacking in previous years but in 2017 investors have been able to shrug off political uncertainty and geopolitical tensions, even sabre rattling between the US and North Korea hasn’t managed to dent investor confidence,’ he said.

The reluctance to invest in the UK over inflation fears and concerns about the impact of Brexit on the economy, means ‘parts of the UK market do look more attractively valued, particularly companies with a domestic focus’.

However, Lowcock said there was 'no clear trigger for these stocks to be revalued as the progress on Brexit negotiations and its impact on the economy is slow and lacking in detail’.

Lowcock added that European companies, to which UK investors have historically been underexposed, were no longer running at a significant discount to their US peers, and were likely to benefit from better growth prospects as the ‘eurozone is at an earlier stage of the economic cycle’.

7 comments so far. Why not have your say?

Micawber

Oct 03, 2017 at 18:16

High risk of no-deal Brexit plus high risk of hard left 'redistributive' government, high risk of plunge in sterling, investors are not fools.

report this

geoffrey mulford

Oct 03, 2017 at 20:55

There is also the thing of having all your eggs in one basket as well.

If the UK economy dies not only do you lose your job you lose you money as well.

report this

William Phillips

Oct 06, 2017 at 13:57

Mutual funds are where marketing-led dumbo money goes to die.

If the herd is betting against Britain, it's good news for Britain.

report this

Franco

Oct 07, 2017 at 11:38

What UK needs is a 1% asset tax on the top 1% who have 1/2 the wealth with abolition of income tax on the bottom 50%. This will increase demand, increase employment, boost our manufacturing industry and fully compensate the top 1%. A virtuous circle. :)

report this

Stephen B.

Oct 07, 2017 at 11:53

Even without Brexit the UK economy would be weak, because productivity is barely higher than it was a decade ago and real wages are lower. Such growth as we've had in the last few years has come from increasing employment, but unemployment is now about as low as it can go and immigration is reducing so that isn't likely to continue. To get back to what would previously have been regarded as normal, i.e. growth of 2.5-3%, we need a step change in productivity growth, and there doesn't seem to be any obvious reason to expect one in the near future.

report this

mark sp

Oct 07, 2017 at 22:20

I have gone from 80/20 UK/Overseas to 20/80

I have used a lot of Inv Trusts to get exposure as I don't really know enough to select individual shares apart from in a couple of industries I know well

i have ended up having an excellent 18 months. i will be thanking Baillie Gifford for years to come SMT, BGFD BGS, Nick train, Michael Lindsell and Terry Smith have also weighed in.

My UK portfolio has beaten the index handsomely but nowhere near what I achieved overseas

"Mutual funds are where marketing-led dumbo money goes to die ===> [ i wish my money had been dying like this for years I would be a multi-millionaire]

If the herd is betting against Britain, it's good news for Britain. ==> [ I just struggle with the logic here so I guess it is more to do with jingoism than economics. If the retail muppets are pulling out but the money isn't, I follow but when the real money is moving too it doesn't matter what the underlying facts are, the result will be falling UK markets - it doesn't matter if Britain is best if the money is elsewhere - until the power players start buying the market will be negative.

report this

William Phillips

Oct 09, 2017 at 11:23

The 'real money' is run by the most sheeplike creatures of all: so-called professional fund managers. Four-fifths undershoot their self-chosen benchmarks.

If the current rationale for their aimless churning is to worry about Britain, so what?

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts


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.

Watch Now

More about this:

Look up the funds

  • Henderson UK Property PAIF Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • SLI Glo SICAV Abs Rtn Glo Bd Strategies A GBP
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Fundsmith Equity
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Aviva Investors Multi-asset Fund I SC1
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Invesco Perpetual High Income
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • M&G Recovery
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the fund managers

  • Terry Smith
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Tom Dobell
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Mark Barnett
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

Today's articles

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 noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Sorry, this link is not
quite ready yet