Brexit resulted in the sharpest stock market fund sell-off by savers on record, new data shows, as experts say investors became “too emotional” over Britain’s vote to leave the EU.
Savers with money invested in stock market funds panic-sold a record £3.5bn from their portfolios in June, resulting in the largest exodus from investment funds in any single month since records began.
The data, published by the Investment Association, the trade body representing the fund management industry, showed the latest sell-off was three times greater than the next largest monthly spike, which occurred in January this year over fears that economic problems in China could hamper global growth.
Last night experts warned investors who sold funds in June may end up regretting their decision, as predictions that the vote would result in a market meltdown have so far been proved wrong.
The vote resulted in sharp falls from the FTSE 100, 250 and the FTSE All-Share in the days after the vote, but these indices have significantly recovered since. For example the FTSE All Share index, which tracks a basket of large and small UK-based firms, is 4pc up since the day of the referendum.
The en-masse sale is thought to have been driven by panic among DIY investors, including over 55s who accessed their pension funds under the new freedoms in record numbers, and wealth managers who exercised extreme caution on behalf of private clients.
Investment houses said investors were selling funds and moving money into cash in the run up to the referendum, with some “opportunist” investors buying up funds the days after the vote.
The Daily Telegraph understands as much as £800m of the total funds sold by retail investors in June was a direct result of one the UK’s biggest wealth managers, Rathbones, offloading the majority of its property fund holdings the day after the vote to leave the EU.
SOURCE: Telegraph
