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Record Outflows from Global Equities
horace972897
Posts: 102 Forumite
Anyone else getting jittery?
0
Comments
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There is a lot of discussion on the pensions forum about increased amounts of tax free cash being taken from pensions ahead of the budget. Especially those with larger pots.
Just a theory !2 -
In the article, fixed income and money markets received inflows worth about 3/4 of the equities outflow, so the majority is staying invested, just not in equities.Albermarle said:There is a lot of discussion on the pensions forum about increased amounts of tax free cash being taken from pensions ahead of the budget. Especially those with larger pots.
Just a theory !1 -
Anyone else getting jittery?no.
You need context. It says "record amount". However, the data is only for 11 years. So, it's a very short period.
Most money invested by UK investors is in model portfolios (adviser or discretionary, multi-asset or professional administrators). Most of these rebalance quarterly or yearly. This quarter saw a significant rebound from earlier in the year. So, any rebalancing portfolio is going to be taking money out of equities to place into defensive assets.
The same Calastone flow index showed outflows from fixed interest after the stockmarket falls earlier in the year with equities having inflows. Now it has reversed again.
Also, like last year, larger investors are doing their CGT use before the budget and portfolios are being realigned to hold more defensive assets in GIAs and growth assets in ISAs. So, sales that may have been done later in the tax year are being done earlier.
Portfolios are increasingly tilting away from US equities and Europe, in particular, has been a beneficiary from that.
Finally, think context. Over £10 trillion is invested by UK investors (UK-domiciled). It's a movement of 0.036%.
Good advertising by Calastone though. The media laps up this sort of data.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.11 -
Finally, think context. Over £10 trillion is invested by UK investors (UK-domiciled). It's a movement of 0.036%.
When reading the article, I wondered if the sums mentioned were probably very small compared to the overall amounts invested.
Thanks for confirming how small they are !1 -
Fund outflows perhaps tell you something about the people who typically get drawn to the funds in question. However, these are typically the same people who manage to underperform the investments they hold for the same reason. Especially the subset who read an article about outflows and conclude they should probably do likewise.2
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I've sold my exposure to India and 'green'/ecology funds and taken profits from BTC, just playing with house money.0
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