UK retail investors pull out of property funds
UK retail investors are pulling out of property and UK equity funds and switching into global and Japan equities, according to analysis by online investment platform Rplan.co.uk.
The analysis shows that the number of trades on the Rplan.co.uk platform was up 175% over the weekend following the Brexit vote versus the previous weekend, and 76% of withdrawals was from property funds and 22% from UK equity funds.
The volume of switching between funds was 4.5 times higher than the previous weekend.
The sectors most bought overall included global equities (56%), Japan equities (20%), UK equities (16%) and North America equities (5%).
Previous analysis showed that UK investors had reduced their investment in UK and European equities and markedly increased their holdings in cash in the run-up to the EU referendum.
The level of new investments in UK funds on the Rplan.co.uk platform were down 63% over the last month and down 46% over the last three months versus the same periods last year.
Levels are down 34% in the last six months versus the same period last year.
However, the levels of new investments into cash are up a staggering 408% in the last three months and up 411% in the last six versus the same periods last year.
“UK investors’ fears about the prospects for property are striking. Clearly, there are worries that property would be affected by a possible economic downturn and the withdrawal of foreign investors,” said Stuart Dyer, Rplan.co.uk’s Chief Investment Officer.
“But investors should not be too hasty in making decisions about the consequences of Brexit. Property and other asset classes have their roles to play in a balanced portfolio invested for the long term. Diversification helps to reduce both the impact of volatility and risk,” Dyer said.