UK Funds See More Outflows in Q2

From Morningstar: 2024-08-08 04:50:00

In the second quarter of 2024, UK-domiciled strategies saw continued outflows despite overall stock market strength. Total net withdrawals since 2022 have reached nearly £80 billion, with UK large-cap equity funds contributing to this trend. Conversely, global large-cap equity strategies experienced significant fund inflows during the same period.

The ongoing trend of investors withdrawing from UK equity funds has seen AUM fall from £280 billion in 2017 to around £200 billion in 2024. Meanwhile, global, US, and emerging markets equity funds have benefited from this reallocation. While UK stocks offer compelling valuations, disappointing performance relative to other markets has driven outflows.

Investors have been shifting towards passive funds due to competitive fees and challenging performance for active managers. Passive funds in the UK now represent 30% of the fund universe, reaching over £340 billion in net assets. This shift has posed challenges for fund houses with a focus on active strategies, particularly in the equity fund universe.



Read more at Morningstar: UK Funds See More Outflows in Q2