Property fund outflows rose to £48m in June, according to the latest Fund Flow Index from Calastone.
The outflow total is up by more than double the figure in May, but remains fractionally lower than the monthly average over the past two years of £51m.
Calastone said a lack of buyers was the cause of the increase in outflows, with selling activity over the last quarter at half the monthly average of the last three years. For property funds, a dearth of buyers means that outflows have proved inescapable.
May’s slowing of outflows was heralded as investors finally became less negative on property as an asset class. However, these latest figures add weight to the prospect that the sector may never regain its appeal in full.
Edward Glyn, head of global markets at Calastone, said: “There is nothing in the June figures to cheer the beleaguered open-ended property sector. Assets under management are down to around £15bn today, only just over 1% of all UK open-ended funds, compared to 3% in 2016. Since that year, when the sector began to shed cash in earnest, we have seen outflows of £7.6bn across the Calastone UK network.
“Outflows have continued this year even as investors are piling heavily into equities, which, like property, should benefit from the long-awaited turn in the interest-rate cycle. If there is one glimmer, it is that outflows have slowed a little compared to the average of the last few years, but it seems unlikely the sector can ever regain its former heft.”
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