Lockdown shock sees record £10bn outflows in March - IA stats
Investor reaction to coronavirus
The initial reaction to the coronavirus lockdown resulted in a record £10bn in outflows from retail funds in March, according to latest figures from the Investment Association (IA).
It said fixed income funds were the worst-selling asset class in March with £7.4bn in net retail outflows.
UK equity funds returned to inflows, however, with net retail sales of £747m during the month, while all other equity regions experienced outflows.
Short term money market was the best-selling IA sector in March. The trade body said its net retail sales stood at £1.7bn, suggesting the value in those funds will be "re-deployed in April".
Responsible investment funds remained resilient in March, with £113m in net retail sales, it added.
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Chief executive Chris Cummings said: "With the fastest switch to a bear market in history, the introduction of global lockdown measures designed to fight coronavirus held significant sway over the fund market in March, with a record £10bn of retail savings flowing out of funds.
"Investors generally avoided taking money out of equity funds at low valuations. Instead, the focus was on bond funds as portfolios were re-balanced and some sought safety in cash.
"The extraordinary scale of central bank interventions in the second half of March saw market sentiment rebound, and is likely to help investors' confidence in April."
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Total funds under management stood at £1.1trn in March, down from £1.2trn in 2019.
The five best-selling Investment Association sectors for 2020 were:
- Short Term Money Market: £1.7bn.
- UK All Companies: £965m.
- Volatility Managed: £257m.
- Standard Money Market: £164m.
- Property Other: £94m.
The worst-selling Investment Association sector in March 2020 was £ Strategic Bond with an outflow of £1.9bn.
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