Last Updated on January 6, 2023 by Bitfinsider

According to new research, investors sold U.K. stock funds at an all-time high last year, outperforming sales in other major countries.

Calastone, a fund network, announced Thursday that overall withdrawals from UK-focused equity funds in 2022 were £8.38 billion ($9.95 billion), the lowest in the network’s eight years of data collection. Equity funds are collections of investments that primarily focus on company stock.

This compares to outflows of £2.65 billion from other European stock funds, £1.17 billion from North American funds, and £1 billion from Asian funds.

According to the business, three-quarters of equity fund losses occurred in the third quarter, which coincided with a particularly stormy period in British politics when former Prime Minister Liz Truss unveiled a contentious “mini-budget.” However, overall investment fund flows were the lowest in at least eight years, owing to skyrocketing prices, uncertainty around the Ukraine conflict, and central banks’ abrupt shifts from monetary easing to tightening.

Meanwhile, passive equity funds that monitor a stock market or market sector had their first year of net withdrawals.

Global environmental, social, and corporate governance equity funds contributed £6.35 billion, while emerging market funds added £647 million.

According to Edward Glyn, Calastone’s head of global markets, interest rate rises have “turned asset markets upside down,” sending investors scurrying to cash and perceived lesser risk fund categories.

“Sentiment has improved somewhat in recent weeks, but there is great uncertainty about the future trajectory of interest rates and economic development throughout the world, and we may still hear the bear roar again before the bull market cycle can begin over,” he added.

However, he stated that this optimism has not reached U.K.-focused funds due to projections that the country would experience the worst recession among major countries.

Separate study published this week by State Street Global Advisors predicted that Europe-based exchange traded funds would be resilient in 2022, with $88 billion in net inflows driven mostly by stocks into “global developed” and “large-cap” funds in the United States. According to the report, investors preferred higher-quality exposures and energy equities.

However, it highlighted that investors have avoided broad European stocks due to the Ukraine conflict, rising inflation, and sharper monetary tightening than had been anticipated.