Unwinding home bias: No bottom in sight for UK fund outflows

Domestic fund buyers remain reluctant to back UK funds

clock • 4 min read

Laith Khalaf explores the exodus from UK funds and says should interest rates fall, demand for 'home team' funds may pick up (but not a lot)

It doesn't take a genius to tell you that the UK stock market is deeply out of favour, but the plight of UK equities is nowhere better encapsulated than in the reluctance of domestic fund buyers to back UK funds. In fact, it's worse than that, because ever since 2016 retail investors in the UK have been relentlessly selling funds that invest in UK equities. Investment Association data shows there has been more than £45bn withdrawn from UK equity funds in the last eight years, and over £24bn of outflows registered in the last two years alone. Just to give some perspective, if that leve...

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