Property outperforms as fund outflows steady 

Outflows from UK property funds held steady in September, despite more negative movement on other asset classes. UK investors continued to sell down their property fund holdings in September, according to the latest Fund Flow Index from Calastone. Some £30m left the sector, roughly in line with August (£33m) and down from the average £49m of monthly outflows over the past 12 months. Calastone said the slight improvement month-on-month had been driven primarily by a reduction in selling activity. The relatively steady monthly picture for property was in contrast to other asset classes, most of which saw investors position themselves much more negatively in September. Fixed-income funds saw very strong outflows as investors banked profits from the bond rally of recent months, while equity funds saw their first outflows since October 2023. Safe-haven money market funds, by contrast, enjoyed inflows. Edward Glyn, head of global markets at Calastone, said: “Lower interest rates are necessary to help the recovery in the commercial property market but they aren’t sufficient. “Economic growth is the key as this drives tenant demand. The new government has laid the gloom on rather thickly over the summer and has dented confidence in the UK economy, which is likely to further impact growth prospects in the short term.”