Data from the Investment Association on fund flows always lags by a month. This meant that last month the picture painted by the figures continued to be one of post-Brexit doom and gloom. UK funds were hit by retail outflows of £1bn in July, which came on top of the record £3.5bn pulled from UK funds in June.
But with a clear direction of travel on Brexit months if not years away, focus among market watchers is shifting elsewhere, namely, the spectre of Donald Trump as the next US president, the Federal Reserve’s next move on interest rates and the effectiveness of central banks’ policies overall. There is also China and a weak oil price to contend with.
While all this rumbles on in the background, UK equity funds have been undergoing something of a resurgence. Despite the headlines, there are still pockets of value to be found.
The Adviser Centre senior investment analyst Marianne Weller explains two major trend reversals seen this year: the switch from mid-caps into more defensive, international companies; and previously unloved sectors such as mining and supermarkets which are now worth another look.
Weller also looks ahead to what to expect on monetary policy and economic growth, and which sectors are likely to offer outperformance.