UK investors have moved a net £62bn of their fund investments outside the UK since the Brexit referendum in June 2016, according to the latest Fund Flow Index (FFI) from Calastone.
In March 2019 alone, as the UK Parliament teetered on the brink of a no-deal Brexit, they placed a net £2.7bn in EU-based funds, almost three times the amount that flowed into UK regulated funds.
Here are some of the key highlights from the report:
- £62bn of capital has flowed into offshore funds since Brexit; £2.7bn in the last month alone
- Before the referendum, only £2.5bn flowed offshore in eighteen months
- Dublin-based funds have enjoyed £42bn of net inflows, Luxembourg has enjoyed £20bn
- Flows have been into all asset classes, reinforcing the suggestion that jurisdiction, not choice of asset, has driven the offshore trend
Edward Glyn, Calastone’s Head of Global Markets, comments:
”Dublin and Luxembourg have been the real winners from the UK’s decision to quit the EU. Before the Brexit referendum, there was relatively busy two-way trade in offshore funds, but the net amount that flowed offshore was extremely small.
”Since June 2016, the picture has changed completely as a wall of UK investor money has fled from the UK to Dublin and Luxembourg, where it will remain inside the EU’s regulatory jurisdiction once the UK leaves the union.”
”Big political events have clearly influenced investors: flows offshore have risen markedly at key moments of instability connected to the Brexit story. Institutional and high-net-worth individuals are mainly responsible for the trend; smaller retail savers remain focused on UK-domiciled funds, suggesting that more sophisticated investors have the greatest concern about the consequences of Brexit”