UK investors withdraw record 3.6bn from shares as market jitters drive shift to bonds and cash

"UK investors withdrew a record £3.6 billion from equity funds during the third quarter, marking the worst three-month run for stock market investments since Calastone began compiling data in 2015. The figures highlight growing caution among investors who have been spooked by high valuations and global uncertainty, prompting a decisive move into the relative safety of bonds and cash. Edward Glyn, head of global markets at Calastone, said it was "really unusual" to see markets at record highs"

"while investors were "moving decisively for the exits across such a broad range of funds". The exodus came despite both the FTSE 100 and S&P 500 posting gains of nearly 15 per cent since the start of the year. Much of that growth has been driven by a small cluster of large technology stocks that have soared on the back of artificial intelligence optimism."

"Glyn warned that "some parts of the US market in particular do seem to be exhibiting signs of irrational bubble behaviour", adding that share prices can "defy fundamentals for a long time - and that is costly for investors on the sidelines." UK equity funds saw the steepest losses in September, suffering net outflows of £692 million. Global funds recorded a fourth consecutive month of withdrawals, shedding just over £200 million,"

UK investors withdrew a record £3.6 billion from equity funds in the third quarter, the worst three-month outflow since 2015. Growing caution over high valuations and global uncertainty prompted a decisive move into bonds and cash. Major indices have risen nearly 15% year-to-date, driven largely by a small cluster of large technology stocks boosted by artificial intelligence optimism. Calastone’s head of global markets described the simultaneous market highs and broad fund exits as really unusual and warned of potential bubble behaviour in parts of the US market. Fixed-income and money-market funds absorbed significant inflows, including £610 million into bond funds in September.

Read at Business Matters