Investors pull £150m from UK property sector
Spooked investors pulled £149m from Direct UK property funds in November 2019, latest fund flow data from The Investment Association reveals.
Outflows for the sector were recorded every month in the year to November 2019, taking the total pulled from UK property funds to £1.85bn.
However, following the suspension of the £2.5bn M&G Property Portfolio fund in December, this figure is likely to be much higher once The IA releases further data.
Indeed, data from global funds network Calastone published earlier this week, revealed that December saw outflows of £314m from UK property funds in the wake of M&G’s pause on dealings.
This was the second-worst month on record with 2019 seeing a record £2.2bn withdrawn from the sector. That’s the equivalent to £1 for every £15 under management.
By contrast, UK equity funds had a rare month of inflows in November, with £108m committed, according to The IA.
Laura Suter, personal finance analyst at investment platform AJ Bell, said: “Despite the inflows in November, investors on the whole have pulled almost £3bn from UK funds in the 12 months to the end of November. Considering the FTSE 100 finished 2019 up more than 17% and the FTSE 250 rose 29% during the year, these investors may be regretting that move now, with the benefit of hindsight.”
Suter added that one trend that’s likely to continue well into the new decade is the mass outpouring of assets from the Absolute Return sector.
“There’s been consistent, meaty outflows from the funds since July 2018 and November saw the highest outflows since the start of 2019, with £656m pulled. Outflows since July 2018 now total almost £7.5bn – meaning that £1 for every £11 invested has been withdrawn during that period,” she said.