Property fund outflows increased to £44m in March, according to the latest Fund Flow Index from Calastone.
This was more than double the volume of February’s net selling (£20m) and was the seventh worst month for equity and fixed income fund flows on Calastone’s 12-year record.
The net outflow was driven by a desire to withdraw cash already invested with sell orders up £21m to £152m. In the same period, buy orders fell just £3m to £108m.
Edward Glyn, head of global markets at Calastone said: “The conflict in the Middle East represents another economic shock and the fallout in the UK could be significant. Property is sensitive to the economic cycle. Even so, outflows from funds, including property, are relatively modest given the potential extent of the damage caused by the conflict and consequent oil crisis.
“Certainly, some fund investors are voting with their feet and pulling capital out of risk assets in favour of cash. But the overall outflows are still well below the levels caused by Budget speculation – when retirees liquidated assets to beat a feared tax increase. Much of the effect of the conflict in the Middle East on the UK and global economy is still unknown, and most investors do not need immediate liquidity which explains why outflows during the current crisis have not been larger.”
