According to figures from the Investment Association (IA), retail investors withdrew £2.6 billion from UK open-ended funds in August 2022 as the outlook for global economic growth continued to deteriorate, marking the seventh month of outflows this year.

August’s heavy selling by fund investors took total net outflows in 2022 to date to £14.6 billion, while the month’s worst-selling IA sector was UK All Companies, which experienced outflows of £772 million.

During the month, equity funds saw the largest net outflow, with almost £3 billion (£2.96 billion) withdrawn by investors, the highest monthly outflow on record and the largest net outflow since the vote for Brexit in June 2016.

Investors yanked £1 billion out of UK equities and withdrew £828 million from global equities. Money market and property funds also experienced net outflows, although fixed income and mixed asset funds bucked the trend by enjoying net inflows. UK funds as a whole suffered net outflows for the thirteenth consecutive month.

Chris Cummings, CEO of the Investment Association, explained: ‘UK households are heading into a challenging autumn and winter
and grappling with a cost-of-living crisis, which may have an impact on their ability to put money aside.

‘With market dynamics in a state of flux, we could see investors react to the surging yield on gilts and UK corporate bonds, or bide their time until we see a period of relative calm.’

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