Investors are continuing to move funds to lower-risk assets as political uncertainty lingers and investor sentiment remains low, data from Morningstar has shown.
Analysis from the research platform showed a continuation in August of the trend seen in the past five months where lower-risk assets experienced net inflows while money was pulled from higher-risk investments.
During August, £1.7bn was withdrawn from all funds — excluding money market funds — and equity and alternative funds led the net outflows.
According to Morningstar, the trend had developed over the past five to six months. It put the trend down to low investor sentiment, where no clarity on the outcome of Brexit and wider concerns of a global slowdown had influenced investors’ confidence in the market.
It also noted the trend could be observed in the United States, in Europe (which in July had its highest monthly net inflows into fixed-income funds since Morningstar started collecting fund flow data in 2007) and more generally throughout the year across all areas.