UK investors shun UK stock market
Overall, ISA sales turned positive for the first time in seven months at £363m, with an additional £256m in the first five days of April.
Retail fund sales in general (ISA and non-ISA) were positive in March, but the net £1.5bn invested paled in comparison with the £4.6bn invested in March 2017.
Asia was the top selling equity market in March, with net retail sales of £232m, in spite of Donald Trump’s trade tariffs creating volatility in the region. The UK All Companies sector was the most unpopular, with net outflows of £432m. Mixed asset and global equity funds also proved popular with investors.
Adrian Lowcock, investment director at Architas, said: “The UK is not just unpopular with foreign investors, it appears the country is still shunned by its own investors. Money continues to flow out of UK equity markets as economic growth remains weak and sentiment remains low while Brexit risk hangs over the country. Although there is a growing voice pointing to the fact the UK market looks cheap in some areas, it is hard to see when and how that will change at present.
“In spite of the trade war threats, Asian equities were the most popular equity sector. This was followed by the US which, although still considered expensive, remains attractive for investors as Trump’s tax cuts are expected to continue to boost corporate earnings and the US economy is well established on the road to recovery.”
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said sentiment towards the UK is now so negative, it begs the question of whether it truly reflects its prospects – especially given the international income streams of so many UK businesses.
She added: “Investors considering moving their money away from the UK should therefore be certain they have robust reasons for doing it before joining what is becoming something of a dash for the door.”