£963m (€1.3bn) flowed out of UK equity funds on a net level over the month, compared to an average of £238m in inflows across the previous 12 months, while Europe ex-UK funds topped the best-sellers list with £663m in inflows compared to an average of £11m per month for the previous 12.
“The last time this sector was the best-selling was in August 2000 with net retail sales of £298m,” the IA said.
In the final week of the 2014/15 tax year net retail sales were £171m, down from the £358m for the same period last year. While part of this slump in sales could be explained by resurgent interest on pensions, said Jason Hollands, Tilney Best Invest MD, he added: “The bigger factor is likely to be mounting anxiety over market levels at a time when the news has been dominated by turmoil in the Middle East, a potential Greek exit from the Eurozone and the uncertainty over the UK elections on 7 May.”
It is also worth noting, too, that at an aggregate basis, net retail sales more than halved year on year in March, coming in at £1.1bn in March 2015, compared to £2.5bn last year. This continues a trend seen over the course of the first two months of the year, where net flows have been lower than in previous comparable periods.
Laith Khalaf, senior analyst at Hargreaves Lansdown: said: “Private investors are staging a buyer’s strike in the lead up to the election. This is pretty par for the course when it comes to the uncertainty generated by such a big political event, and the Footsie reaching a record high won’t have helped matters.
But, he added: “Investors need to take a deep breath and try to tune out the election clamour when it comes to making decisions about their portfolio. The election can certainly dent market confidence in the short term, but it won’t have a significant impact on the long term profits of UK companies, many of which derive their earnings from overseas.”
