2022 was the worst year for retail fund outflows, with £25.7 billion, according to data from the Hargreaves Lansdown Investment Association. December was the 10th worst month for net outflows in 2022.
The second worst year for fund flows was 2008, which saw inflows of £4.2 billion Responsible funds and ETFs were the only sectors to record inflows of £5.4 billion and £11 billion, respectively.
“It is no surprise to see investors turned off markets in 2022, a year of extreme economic and political turmoil. But the scale of the outflows is eye-watering. Outflows of more than £25bn illustrate the wall of fear investors had to climb to see through the news headlines last year.
It wasn’t just the atrocities in Ukraine, but the associated inflation and rising cost of living, the disastrous mini-budget from the short-lived Liz Truss prime ministerial leadership, and the lingering spectre of coronavirus which weighed heavily on investors’ minds – and trading.
2023 has got off to a more optimistic start, with the FTSE 100 flirting with record highs, and the US market being led by better-than-expected results from a number of the tech giants, and falling inflation. HL clients have responded to the rally by buying into global equity funds – though more cautious money market and total return funds also hit the top 20 for January. Perhaps those investors recognise we’re not out of the woods yet, and know to expect more volatility through the year, as markets digest jobs figures, inflation outlook, central bank policy – and the ongoing war in Eastern Europe.”Emma Wall, Head of Investment Analysis and Research, Hargreaves Lansdown.
Top 20 Funds, Jan 2023 (net buys, alphabetical)
|Artemis High Income|
|Baillie Gifford American|
|EdenTree Responsible and Sustainable Managed Inc|
|Fidelity Index World|
|Jupiter Asian Income|
|Jupiter Global Value Equity|
|Legal & General European Index|
|Legal & General International Index Trust|
|Legal & General UK 100 Index Trust|
|Legal & General US Index|
|Polar Capital Global Insurance|
|Pyrford Global Total Return|
|Royal London Short Term Money Market|
|Schroder Managed Balanced|
|Vanguard FTSE Global All Cap Index|
|Vanguard Global Equity Income|
|Vanguard LifeStrategy 100% Equity|
|Vanguard LifeStrategy 80% Equity|