You are here: Home - Investing - Experienced Investor - News -

Coronavirus sees Asia-focused funds suffer worst month in over two years

0
Written by: Paloma Kubiak
11/02/2020
Asia-focused funds were hit hard following the outbreak of the coronavirus, suffering their worst month in two-and-a-half years, according to fund researchers.

UK investors pulled a net £61m out of Asia funds in January – the largest figure since July 2016 – as investor confidence slumped amid the spread of coronavirus, according to analysis from global fund network Calastone. Gross redemptions of Asia focused funds were £462m in the month.

Equity funds in general suffered in January, with inflows dropping sharply following renewed interest in December.

In total, £475m flowed into equity funds in the first half of January, but this slowed to £141m in the second half.

Overall, net inflows fell by more than two thirds to £618m last month. Calastone said two-fifths of this new capital flowed into UK equity funds.

Active funds saw inflows of £206m in the first half of the month turn into outflows of £128m in the second half as news of coronavirus hit, but index (passive) funds remained relatively unaffected.

The popularity of ‘safe haven’ fixed income funds rose, with inflows 50% higher than their 12-month average, while outflows from property funds slowed to £78.1m, their lowest level since May 2019.

Edward Glyn, head of global markets at Calastone, said: “The investor verdict on active equity funds was swift and decisive but passive funds were untouched. In times when confidence is weak, active funds bear the brunt of selling, while passive funds are relatively unscathed. By the same token, a sudden upturn in confidence, like we saw in December, is far more positive for active funds.

“Passive funds are cemented into regular savings plans via ISAs and pensions so investors clearly do not tinker with their passive holdings that much. By contrast, they trade their active funds much more dynamically, responding quickly to market events as they happen.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week