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

Investors pull £1.5bn from equity funds in a week over coronavirus fears

Written by:
Spooked investors pulled £1.55bn from equity funds in just a week as the market crashed off the back of the heightened coronavirus threat.

Equity funds saw solid inflows in the first three weeks of February of £1.2bn but from the 24th of the month, investors sold a record £1.55bn of holdings. This meant a £348m net outflow figure for February.

According to global fund network Calastone, February 2020 was the worst month since October 2016 for outflows across all fund types in all asset classes.

Figures show 98% of outflows in the final five days of the month came from actively-managed equity funds (£1.18bn of capital). In comparison, index funds only felt a minor impact (£25m).

Global funds were hit the hardest, suffering record outflows, with Asia and Europe bearing the brunt of the sell off.

Calastone figures reveal a net £309m left global funds last month, with £881m flowing out in the last five days alone.

UK funds escaped relatively unscathed as they saw inflows of £227m, only suffering significant selling (£107m) on the last day of the month as the FTSE 100 reached its lowest level in almost five years.

Overall, UK investors pulled a net £144m out of their fund holdings, opting to sit out the volatility in cash.

Edward Glyn, Calastone’s head of global markets, said: “Fear ate greed for lunch in the last few days of February, as equity funds saw outflows at their most ferocious in five years. After an initial flurry of outflows in January, funds benefited from extreme complacency over the coronavirus outbreak. But the news that the epidemic had taken hold in Italy and then quickly spread across the world caused a dramatic re-assessment of its potential impact on the global economy. Investors have voted with their feet.

“The curiously relaxed approach to funds focused on UK equities reflected the limited number of infections, as well as the extremely low valuations for UK shares. That was enough to keep the sellers at bay for a time, but by the last day of the month there were signs of capitulation even for this sector too.”

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.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

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.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

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?

Money Tips of the Week