Investors continued to pull money out of UK equity funds in the last month of 2017 reaching a total of £2.6bn outflows for the past year following continued economic and political uncertainty, figures from the Investment Association show.
Equity funds saw net retail sales of £10.5bn for 2017 which caught up with the £8.5bn outflows seen in 2016, where most of the money flew out of the UK equity sector in the aftermath of the Brexit vote. The UK equity sector saw £202m outflows in December alone.
The global sector, instead, was the best-selling sector in 2017 within equities and the second-best selling IA sector altogether, with £4bn in new retail money.
Overall, the increase in net sales in 2017 progressed in December where £3.7bn net new money came into the investment industry.
Nearly half of the net new money was due to investors tapping into mixed asset funds, which saw £13.5bn inflows over 2017, with £1.7bn inflows in December alone.
Mixed asset funds were followed by fixed income with £979m of new money for December, which was the most popular asset class, despite high returns from stock markets during the year.
Investment Association chief executive Chris Cummings says: “Altogether, 2017 was a record breaking year for IA members with funds under management reaching an unprecedented £1.2trn. This was an increase of £181bn from the previous year, with £63bn coming through net sales and £118bn through investment growth, equivalent to a 10 per cent return to investors.
“Notably, over £1bn of net retail money flowed into ethical funds, the highest annual inflow into this type of fund. As sustainable investment becomes an increasing priority for today’s investors, the IA will be launching a sustainability and responsible policy group to provide a hub for investor leadership to further promote sustainable investment in our industry.”