UK Investors’ Stock Bets Decline in August, According to Calastone

Investors Shift to Safe Havens Amid Market Turbulence

LONDON – In August, UK investors reduced their investments in equities and redirected funds into money market accounts, according to data from fund network Calastone. This shift followed a period of market instability at the beginning of the month, prompting a more cautious approach.

Net inflows into stocks plummeted by 75% compared to July, decreasing to £545 million ($714 million) – marking the lowest level since November. Nonetheless, this was the tenth consecutive month of positive inflows into equities.

Global stock markets experienced significant selling pressure early in August due to disappointing economic data from the U.S. and an unexpected interest rate hike by the Bank of Japan. However, they later managed to rebound, resulting in a fourth month of overall gains.

The bulk of equity fund selling occurred in the initial three days of August, during which UK investors withdrew £206 million. After this initial drop, inflows began to recover but remained at a more subdued pace, as indicated by the research.

"Investors were unsettled when global markets experienced turbulence in early August," remarked Edward Glyn, head of global markets at Calastone. "Outflows transformed into inflows once market conditions stabilized, but it’s clear that investor confidence has been shaken."

Additionally, in a reflection of cautious sentiment, investors channeled £593 million into money market funds linked to interest rates during August, the highest level seen in a year.

Bond funds also faced significant selling, with UK investors withdrawing a net £516 million, marking one of the weakest months recorded by Calastone.