UK traders shun British funds in favour of surging US valuations

Equity funds are having fun with a bounce-back amongst UK traders

UK traders piled into fairness funds on the quickest fee for practically three years final month – however shunned the sluggish British market in favour of surging US valuations.

Inflows of £2.66billion in February have been the best since May 2021, however £633 m was pulled from UK-focused funds, in accordance with business group Calastone.

Instead, it was North American fairness funds that benefited most, with a file £2.54billion added, as traders sought to climb aboard the tech-driven rally in New York. Even European equities gained, with inflows of £363million. 

Meanwhile, China’s sluggish financial system left Asia-Pacific funds struggling, with outflows of £229million.

Overall, fairness funds are having fun with a bounce-back amongst UK traders, with £6.31billion piled in over the past 4 months after a ‘punishing’ 18 months which noticed £8.6billion pulled out.

Inflows to cash market funds – which purchase safe-haven investments resembling authorities bonds – have slowed sharply since final yr as an urge for food for increased danger comes again. 

Edward Glyn, head of worldwide markets at Calastone, stated traders have been ‘jumping back into equities feet first’ with curiosity pushed by the US inventory markets rallying by greater than a fifth in worth since late October.

‘A rising tide is not lifting all boats, however,’ Glyn added.

‘Nothing can persuade UK investors to add capital to their home market, despite very low comparative valuations.’