Net retail sales for UK-authorised funds were at their lowest point in 18 months in June, reflecting investor uncertainty amid a "continued uncertain political landscape" and trade war fears, according to the Investment Association.
The IA's latest figures reveal the lacklustre June sales total of £840m nudged up total industry AUM to £1.2bn, as investors continued to withdraw assets from the beleaguered UK equity and European equity funds.
Alastair Wainwright, fund market specialist at the IA, said the fall in sales could be attributed to "a continued uncertain political landscape and the possibility of a trade war".
UK equity funds saw June withdrawals of £280m, bringing average monthly losses over the last 18 months to £443m, while European equity funds also saw June redemptions reach £280m.
Chief executive of the IA Chris Cummings (pictured) said: "Brexit uncertainty continues to weigh on investors with UK equities facing a further month of outflows.
"As we approach the deadline for the UK leaving the EU both sides must commit to building a framework that delivers prosperity for the millions of savers in the UK and Europe."
The trade body has been vocal in its position on the UK's negotiating priorities ahead of the country's divorce from the bloc, lobbying government and publishing its key goals. Earlier this week, (1 July) it was reported that the IA is looking to open a new office in Brussels, in efforts to better reflect its members' multi-national presence as well as improve engagements with European regulators and policymakers.
In the context of market jitters over a potential trade war, the North American Smaller Companies and North America sectors were the best performing in June, returning 1.7% and 1.3% respectively. Meanwhile China was the worst-performing sector with a 4.1% loss.
Explaining why investors had followed this trend, Wainwright said: "The Global equity sector, which has a high proportion of US exposure, was the best-selling sector (£291m) and North America (£243m) third best-selling sector.
"The Mixed Investment 40-85% Shares sector was second best-selling at £272m."
The Volatility Managed sector was the fourth best-selling with net retail sales of £149m, while the fifth best-selling was Targeted Absolute Return with net retail sales of £143m.
The worst-selling sector meanwhile was £ Strategic Bond with an outflow of £413m.
Wainwright added: "Passive funds' increased market share from 13.2% in April to 14.1% in June, was due to the IA receiving sales and FUM data for a significant number of large index tracker funds, which we didn't previously report.
"This increase in passive FUM led to a slight decrease in fund of funds' market share, which has dropped from 12.9% to 12.4%."
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