UK fund stampede saw £3.7bn flee last week with bond funds worst hit

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RECORD amounts of money flowed out of UK funds last week with bond funds particularly hard hit with £1.7 billion of redemptions.

In one of the worst weeks on record, UK-based investors piled out of equity and fixed income funds and shifted into safer areas like cash and gold. 

Total outflows between Monday and Friday totalled £3.7 billion, pushing outflows for March to nearly £5 billion, figures from fund management tech firm Calastone show. 

Tuesday alone saw nearly £1 billion leave funds.

Several days of equity inflows helped cushion some of the rout in fixed income, which have had outflows every day since March 9. 

Calastone’s head of markets Edward Glyn said: “Dislocation in the bond markets, fears of corporate and sovereign defaults, and reaction to unprecedented government borrowing aimed at warding off an economic depression have left investors with nowhere safe to go.”

The data does not break down which types of fixed income funds suffered the largest outflows. 

Some, like high yield funds, often contain assets which are difficult to sell. 

The Financial Conduct Authority stepped up monitoring of all UK funds two weeks ago, asking depositaries to inform the regulator if a fund drops by 10% or more in a day due to market falls or outflows. 


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March 25, 2020 |
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