Brexit drains £30bn from UK funds

Investment funds based in the UK haemorrhaged £30bn in the 12 months to the end of March, as Brexit uncertainty prompted investors to spurn UK assets and shift money to EU-regulated products. The UK came close to leaving the EU without a formal agreement on March 29. Although this possibility was ultimately precluded by an extension to the exit date, news of the delay came at the last minute. New research by Morningstar, a data provider, shows that funds domiciled in the UK were hit hard by the Brexit unease, losing £5bn in assets in March and £30bn in total over a 12-year period. Bhavik Parekh, associate analyst for manager research at Morningstar, said: “In the months leading to the deadline, investors and fund [managers] became increasingly worried over the impact of an unfavourable deal and its negative implications.” The outflows were partly driven by investors culling their exposure to asset classes vulnerable to Brexit shocks, such as UK companies. UK equity income funds — a longstanding investor favourite — bled £3.1bn over the year to the end of March.