An extra £1.5bn was invested in responsible investment funds in October, according to data unveiled by the Investment Association (IA).
The total value of responsible investment funds reached £88.7bn, or 5.7% of industry funds under management. The global market was the bestselling IA sector in October, with inflows of £730m.
UK, Japan and North America funds all experienced outflows in October 2021. The UK saw net retail outflows of £661m, North America funds £187m and Japanese funds £8m .
Outflows from UK equities and North America were partly offset by inflows to funds investing in global equities at £586m and Asia at £201m, but equity net sales overall were down by £700m from September.
The worst-selling IA sector in October was UK All Companies, which experienced outflows of £349m.
“Responsible funds continue to see significant inflows from retail investors keen to do good and make money at the same time,” said IA head of investment analysis and research Emma Wall, adding, however, that £88.7bn is “small fry” compared to the wider market.
“Looking across the IA sectors, it is good to see investors taking gains from US equity funds, which have delivered considerable returns in recent years. Driven by growth stocks and tech firms, many US funds have defied the coronavirus headwinds faced by domestic equities in the UK.
“The UK market continues to be unloved, despite the potential value opportunity versus global peers, and UK equity funds saw outflows of £661m in October.
“Global funds topped the most popular sector. It is worth noting that these fund flows were prior to the recent identification of the new coronavirus variant, and the impact that has had on global markets.
“We have seen a shift in the last week towards more defensive assets, and fund flows for November should reflect this change in sentiment.”
Image credit: iStock
Author: Huw Morris