Deep Dive: Investors pin hopes of UK outflows reversal on brighter growth and policy reforms

Valuations not enough to turn the tide

The cheap valuations of UK-listed companies may not be enough to stem the tide of outflows on their own, but a brighter economic outlook and potential policy reforms are offering hopes of a turnaround.

Investors pulled £666m from UK equity funds in September, while the UK-focused equity income sector lost £416m, according to the latest Calastone Fund Flows index. The research showed UK-focused equity funds have not registered a positive net inflow of capital since 2021. This followed a nascent resurgence in interest in domestic equities first detected in July, when outflows from funds focused on domestic equities contracted to their lowest level in three years after Labour's sweeping general election victory. Equity fund flows turn negative as investors shun UK In the aftermath, ...