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

New record for ESG inflows while investor risk appetite soars on vaccine news

Written by:
The Covid-19 vaccine news last month saw the second-highest inflow into equity funds on record, as investors ploughed capital back into the riskiest assets as well as ESG funds.

The latest Fund Flow Index from global fund network, Calastone, revealed net inflows into equity funds in November totalled £2.3bn, the second highest on record after April 2020.

Calastone said the link to the vaccine announcements is “clear to see” as in the five days before the Pfizer vaccine news, equity funds saw outflows of £389m.

But in the five days after the vaccine news, inflows totalled £1.4bn. The network said investors sold safe-haven money markets on the back of the Pfizer news as they took on more risk in equity funds.

A further £897m flowed into equity funds in the five days following Moderna’s vaccine news. And the Oxford/Astrazeneca vaccine news saw investors part with £429m.

However, UK-focused equity funds were the only major equity fund category to see outflows in November (-£222m).

But ESG (Environmental, Social, and Corporate Governance) fund inflows broke new records.

A total of £820m of new capital was added to the category – more in the single month of November than in the entire five years to January 2020.

Meanwhile, the US election caused a more muted reaction as cash flowed out of equity funds into safe-haven alternatives.

The network noted that active funds had their best month in five years, with £1.6bn of new capital in the month of November, reversing the cumulative outflows seen since May 2020.

Most of the money went into active global funds, which witnessed a record £1.5bn of inflows. Index tracking funds saw £713m of inflows, broadly in line with the monthly average of the last year.

‘Huge sigh of relief that pandemic nearing an end’

Edward Glyn, Calastone’s head of global markets, said: “The long-awaited vaccine news could scarcely have been any better. Despite languishing in renewed lockdown confinement, investors went off to the races to celebrate.

“Record fund turnover, record inflows for some of the biggest equity fund categories and near-record inflows for equity funds overall add up to a huge sigh of relief that the end may finally be in sight for the pandemic and its devastation of the global economy. A big switch from safe-haven to riskier assets is all part of this excitement.

“Active fund managers will also celebrate such a successful month after enduring months of outflows. Anchored in monthly savings plans, index-tracking fund flows tend to be steady and positive, but active funds benefit much more when there is a big positive swing in sentiment.”

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.

Unfamiliar banks woo savers with top rates…is your money safe?

If you’ve been keeping an eye on the savings best buy tables, you’ll have noticed some unfamiliar names lu...

What the base rate rise means for you

The Bank of England has raised the base rate by 0.25% to 0.5% – following on from the increase from 0.1% to ...

How to get help with your energy bills

The rise in the energy price cap from April will mean millions of households will pay hundreds of pounds a yea...

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week