Calastone: UK investors shun regional equity funds in favour of global strategies

investmentweek.co.uk:

Since July 2021, global funds net inflows stood at £18.9bn, while funds with a regional focus have shed £21.1bn.

According to the latest fund flow figures from Calastone, global funds have enjoyed net inflows of £51.3bn since 2015, compared with just £909m for all other geographical categories.

Even when excluding UK funds, which fell significantly out of favour in the run-up to, and aftermath of, Brexit in 2016, regionally focused funds only saw £16.7bn of net inflows over the same time period.

Since the start of 2015, net outflows from global funds have occurred in just nine months, compared to one in two months for all other regional strategies combined. According to Calastone, this trend has accelerated over the past two years.

Calastone: UK investors shun stocks despite global rally

Since July 2021, global funds net inflows stood at £18.9bn, while funds with a regional focus have shed £21.1bn. It is likely the pandemic had a part to play in the increasing loss of faith in British assets. as well as a need to own more diversified assets, the firm said.

ESG funds may well have also been an important driver in the shift to global funds, accounting for two fifths of their inflows since 2015 (£21.9bn) and seven tenths since July 2021 (£13.6bn).

Meanwhile, the Investment Association also revealed that assets under management have mirrored this trend.

A decade ago, the value of funds investing in UK companies was double global funds and, even by October 2017, UK funds were still 70% larger than their global counterparts.

But the industry trade body's May 2023 figures show global funds are now one-sixth larger than UK-focused funds.

Edward Glyn, head of global markets at Calastone, said there is a «clear logic» in opting