Property funds shed £76m in February
Property funds saw £76m of outflows in February, according to the latest Fund Flow Index from Calastone.
There have now been more than £7.5bn of outflows from property funds since investors first turned negative on the sector in October 2018.
Since then, only three months have seen inflows. The remaining 62 months have seen outflows, except when funds were gated early in the pandemic.
Property funds saw £76m of outflows in February, according to the latest Fund Flow Index from Calastone.
There have now been more than £7.5bn of outflows from property funds since investors first turned negative on the sector in October 2018.
Since then, only three months have seen inflows. The remaining 62 months have seen outflows, except when funds were gated early in the pandemic.
Calastone said in most other asset classes the net fund flow was a small difference between a large volume of buy and sell orders, but that this was not the case with property funds, for which buyers are very thin on the ground. Instead, it said selling has represented around three quarters of all the orders that flow across Calastone’s network in recent months.
In February, sell orders totalled £108m with buying at just £32m.
Edward Glyn, head of global markets at Calastone, said: “It is increasingly difficult to see where this trend of outflows ends for open-ended property funds. Trading restrictions have failed to staunch the bleeding and, arguably, may have made the situation worse by undermining confidence in the sector.
“Cyclical questions aside, there is nothing inherently wrong with property as an asset class – it can play a valuable role in a diversified portfolio – but it is clear that investors and many fund managers have concluded the open-ended structure is not for them.”
