UK retail investors withdrew £4.5bn from open-ended funds in June, the highest monthly outflow of the year so far, according to the latest data from the Investment Association.

The month was the second highest for withdrawals on record.

Gross retail sales through UK intermediaries, including Financial Planners, were £6bn, representing a market share of 26.8%.

Equity funds saw the highest outflows with £2.3bn.

Outflows were largely from globally-diversified equity funds which experienced outflows of £1.3bn, the biggest outflow since the aftermath of the 2016 Brexit referendum vote results.

Mixed asset funds saw outflows of £268m.

Tracker funds saw net retail outflows of £41m in the month, only the second outflow in a decade.

The best performing sector in June was Volatility Managed. The sector reported net retail inflows of £248m. Global Equity Income was the second highest selling sector with net retail sales of £189m.

Flows into Responsible Investment Funds remained positive, with net retail sales of £71m in June. However, this was a big drop from the £1.6bn of inflows reported in May.

Japan was the best-selling equity fund region in June 2022, with net retail sales of £15m.

Chris Cummings, CEO of the Investment Association, said: “Savers are pre-empting slowing economic growth and preparing for further interest rates rises as we enter new territory for markets. Higher rates mean a weaker performance outlook for the high-growth companies that helped to fuel the bull market of the last decade. This month’s equity fund outflows indicate that investors are looking at ways to better balance their savings.

“All major asset classes experienced outflows in June as investors continue to adjust to the end of the low interest rate era. Investors turned to lower-risk asset classes as a bulwark against rising market uncertainty, and UK Gilts sold well.”