UK equity funds suffer second-largest outflows on record, says BofA ML

Figures from Bank of America Merrill Lynch’s weekly ‘flow show’ report showed outflows from UK equity funds were the second-largest on record as Brexit woes took their toll.

“June thus far has been all about the risk-off Brexit trade, i.e. long gold, US bonds, yen and short oil, UK/EU equities, British pound,” the bank said.

“The flow of funds is palpable evidence of Brexit fear in the markets,” said Jasper Lawler, market analyst at CMC Markets.

BofA ML noted the 19th straight week of outflows from European equity funds, with $4.7bn, which was the largest amount in seven weeks.

Meanwhile, bond funds experienced outflows of $1.2bn – the first outflows in 11 weeks and the largest in five months – while precious metals saw inflows of $1.1bn as the yellow metal’s safe-haven appeal grew.

European and UK stocks have been under pressure of late as polls suggested the Leave campaign was taking the lead in the referendum debate, but the mood changed on Friday as campaigning on both sides was suspended following the murder of a British MP on Thursday.

Labour MP Jo Cox was shot and stabbed in her constituency town of Birstall near Leeds by local resident Tommy Mair, who is reported to have shouted “Britain First” as he attacked her. There was a sense among market participants that the attack could sway public opinion back towards a Remain vote.