Economy3 hours ago (Sep 07, 2020 07:15PM ET)
LONDON (Reuters) – UK-focused equity funds saw record outflows of 1.2 billion pounds ($1.58 billion) over the past three months as investors worry about a no-deal Brexit and the impact of the coronavirus pandemic, data from fund network Calastone showed on Tuesday.
The United Kingdom left the EU on Jan 31 but is trying to hammer out a trade deal with the bloc by the end of the year.
The divorce veered into fresh crisis this week after London threatened to undermine the exit agreement unless free trade terms are agreed by next month.
The British economy also shrank by a record 20.4% in the second quarter due to COVID-19 restrictions, underperforming the United States and the euro zone.
Edward Glyn, head of global markets at Calastone, said the two issues were “prompting investors to dump their UK holdings”.
UK funds saw 667 million pounds of outflows in June, 368 million in July and 195 million in August, while non-UK funds collectively saw a total of 1.6 billion pounds in inflows over the same period, Calastone said.
More than two thirds of UK-based fund flows by value pass across the Calastone network each month.
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