Net retail sales of investment funds returned to positive inflows of £1.6bn in November, following the UK Budget and US election.

New data published by the Investment Association showed the bounce back followed two consecutive months of outflows in September and October.

In those months there were outflows of £5.9bn and £3.4bn respectively as investors took action to avoid a widely anticipated increase in capital gains tax in the Budget.

Equities saw inflows of £243m in November, following outflows of £6.6bn over the previous two months. North American equities were most popular in November with net retail sales of £590m, while global equities saw an inflow of £400m.

UK equity outflows continued, but fell to £552m, the best figure since a £445m outflow in August 2021. Fixed Income funds returned to inflow, with net retail sales of £524m and index tracker inflows remained strong at £1.9bn.

Actively managed funds remained in outflow with net retail sales of -£317 million, the most reduced outflow since their last inflow in December 2021. Mixed asset funds saw minor outflows of £45m.

The IA said Trump’s victory in the US election triggered a wider positive market reaction as markets priced in a more positive outlook for US equity returns given the Republican’s domestic growth and pro-markets agenda.

North America was the strongest selling IA equity sector in November, with total inflows of £428m, as well as £162m to North American Smaller Companies sector funds over the month. 

Miranda Seath, director, market insight & fund sectors at the Investment Association, said: “With the Budget and US election now in the rearview mirror, equities looked to be back in vogue in November.”

She predicted that investors will be watching closely to see what the year ahead holds. “Trump’s pro-business agenda is likely to fuel US growth further, potentially leading to higher inflation. However, the prospect of uncertainty lingers, as potential tariffs could significantly impact global trade.”

She said that in the UK, weaker economic data, combined with the introduction of national insurance contributions for businesses may also lead to price rises. “In this climate, both the Bank of England and Federal Reserve are likely to be cautious about cutting rates.”

New funds under management and net sales November 2024  

Source: Investment Association

 The five best-selling Investment Association sectors for November 2024 were:  

1. Short Term Money Market with net retail sales of £648m.  
2. North America followed with net retail sales of £428m. 
3. Global with net retail sales of £423m.   
4. Volatility Managed with net retail sales of £339m.   
5. Corporate Bond was fifth with net retail sales of £304m.    
    

The worst-selling Investment Association sector in November 2024 was Mixed Investment 20-60% Shares which experienced outflows of £329m.