Brexodus fears for UK equity funds overblown, says Morningstar
The investor flight from UK equity funds since the 2016 Brexit referendum does not amount to a “mass exodus”, according to Morningstar. The influential analyst claims only a handful of funds have suffered significant outflows.
According to Morningstar, funds investing in UK companies have posted net outflows of €16.7bn between June 1, 2016 and the end of October 2018.
“That sounds like a lot of money, but it isn’t,” said Morningstar. The outflows represent only a small fraction of the €528bn invested in UK equity funds at the start of June 2016.
In fact, UK investors have invested a net €177.5bn into long-term funds between June 2016 and October 2018, Morningstar said.
Although UK equities continue to be out of favour — the most recent Bank of America Merrill Lynch fund manager survey showed the UK to be the most disliked region — outflows have been “exacerbated by fund-specific issues on a small number of the biggest funds in the category”, said Morningstar.Read Full Article