Property funds failed to capitalise on ISA season and finished April with net outflows of more than £50m, according to the latest Fund Flow Index from global funds network Calastone.
In the first week of April, which covers the end of the financial year, property funds shed £12.4m, finishing the month with a total net outflow of £54.8m. This was in contrast to other major asset classes, such as equities, fixed income and mixed assets, which saw positive inflows in the first five days of April.
For every pound of selling in property funds, there was 42p of buying. It leaves property funds with only one month of net inflows in more than five years.
Edward Glyn, head of global markets at Calastone, said: “There is obviously nothing wrong with property as an investment. There are challenges today associated with getting the right kind of property in the right place to meet the needs of today’s economy.
“But people need buildings and buildings generate an income, so they can be valued – the cornerstone of building an investment case. Capital will chase the opportunity – but the open-ended fund may not be part of the race in future.”
At a broader level, investors added a net £193bn to equity funds and £422bn to fixed-income funds, with mixed assets seeing the first net inflow after 11 months of net selling. ISA season played a significant part in this, with investors looking to bank leftover ISA allowance before the end of the financial year.
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