Surging inflation and the outbreak of war in Europe took their toll on investor sentiment in February according to our latest Fund Flow Index.
Key highlights from this month’s FFI:
- Equity funds saw a surge of outflows following Russia’s invasion of Ukraine, leaving February as the second-worst month for equity funds since July 2020
- Post-invasion outflows were driven by a sharp drop in buyers and only a modest increase in sellers – suggesting caution rather than a rout
- Funds focused on all geographies saw outflows following the invasion, but active UK equities funds were hit hardest
- ESG funds continued to enjoy inflows
- Fixed income funds suffered the brunt of inflation fears, with outflows accelerating on war news – again a dearth of buyers was more to blame than a surge in selling