Money market funds stand as sole asset class with net inflows in 2023
Investors redeemed £32.5bn from all asset classes in 2023, surpassing 2019 for the largest outflow in absolute terms.
According to Morningstar's latest UK Fund Flows report, money market funds attracted over £4bn inflows last year, taking in £248m in December alone.
By comparison, equity funds suffered almost £3.5bn more redemptions in 2023 than the prior year, and failed to record a single month of net inflows, with £668m withdrawn in December.
Fixed income funds shed £826m in December, raising the total to £254m of net outflows in 2023, while Morningstar's ‘Allocation' category saw £507m outflows last month, for a total £7.8bn for the year.
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Investors redeemed £32.5bn from all asset classes in 2023, surpassing 2019 for the largest outflow in absolute terms. However, in relative terms, 2019 saw a larger outflow.
Year-end aggregate flows also showed a pronounced trend to sustainably labelled and passive strategies from non-sustainably labelled funds and active managers.
Sustainable funds saw £5.7bn outflows over 2023, while non-sustainable funds suffered £26.9bn in redemptions. Flows to sustainably labelled strategies were more muted than in recent years, however.
Passive funds gained £21bn inflows last year, as active managers shed £53.5bn. In December alone, trackers attracted £1.9bn inflows, while active funds saw £3.9bn in redemptions.
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The largest category inflow in December was US Large-Cap Blend Equity, with £866m inflows, although the category saw a total of £1.2bn in net outflows in 2023.
Meanwhile, GBP Flexible Allocation suffered £527m in redemptions last
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