Investors flee U.K. real estate funds

U.K. domiciled real estate funds shed £2.1 billion ($2.7 billion) over the fifteen months ended Dec. 31, after five consecutive quarters of net redemptions. Since the June 2016 Brexit referendum, the asset class has had net outflows of about £2.9 billion, offset in part by tepid but positive investments from June 2017 through Sept. 2018. During 2019, gross outflows outnumbered inflows by nearly 2-to-1, Calastone reported. Additionally, the global fund network noted the asset class' diversity and how economic views affect its subsets differently, so an exodus of this sort would be more indicative of the economy as a whole.

Elsewhere in U.K. fund flows, the same trends emerged in the U.K. that have defined U.S. open-end fund investing: strong interest in passive equity, global in this case, and large moves into mixed-asset funds such as target-date funds. A total £70.4 billion in investor money has left the U.K. for Dublin and Luxembourg since the Brexit referendum, Calastone noted. And equity fund flows would have been negative if not for a late-year run up in inflows sparked by hopeful trade news and the Conservative Party's election victory.