RECORD POST-BUDGET INFLOWS TO EQUITY FUNDS AS INVESTORS AVOID THE TAX HIKES______

UK investors flocked back into equity funds in record size in November, according to the latest Fund Flow Index from Calastone, the largest global funds network. After October’s record outflows, prompted by fears, subsequently justified, that the Chancellor would hike capital gains tax, November in turn saw equity-fund inflows at all-time highs, breaching the £3bn mark for the first time. The two months mirrored each other closely. October’s net selling was £2.71bn as investors took profits, while November’s net buying was £3.06bn as investors reinvested all the funds they had withdrawn the month before.

Key highlights from this month’s FFI:

• November net buying of equity funds surged to a record £3.06bn
• The inflow exactly matched the pre-Budget record outflow as investors banked their profits to avoid CGT increases
• UK-focused equity funds saw their first inflows in 42 months, but this is unlikely to mark a renewed turnaround for the unloved UK market
• Fixed income funds saw net buying increase as investors sought to lock into high yields

View this edition of the FFI in full