Cash is being drained from UK equity markets by investors fed up with years of lackluster returns. The FTSE 100 Index has rallied about 14% over the past year, compared with a 27% gain for the S&P 500.
There’s so much money being pulled out of UK equity funds that fund managers are more focused on what stocks to sell than what to buy, according to David McCann, an asset manager analyst for Deutsche Bank.
“Funds are very much on the back foot,” he wrote in a note to clients. They’re more concerned with making sure there’s enough liquidity and balancing their portfolios, “rather than more pro-actively thinking about what to buy”, he added.
