Retail investors in the UK put £1.2bn into funds in June, bringing overall inflows up to £1.7bn for the first half of 2024, data from the Investment Association (IA) has shown.

This represents a resurgence in investment following overall outflows of £5.6bn and £18.6bn in H1 and H2 2023 respectively.

The IA stated that this bounce back further signalled a potential “turn of the tide” for fund flows and improving investor confidence.

Index trackers took in £2.6bn in net retail sales in June, the majority of which being to equity index trackers.

Inflows to index trackers for the first half of 2024 totalled £15.1bn, already exceeding the £13.8bn inflow for the whole of 2023.

Retail investors put a net £1.2bn into equities in June, bringing the first half inflow up to a positive of £424m.

This H1 positive inflow was driven by a rebound in sales in Q2, the IA noted, which saw inflows of £2bn, up from outflows of £1.6bn in Q1.

By comparison, equities saw a “significant” outflow of £10bn in the first six months of 2023.

While UK equities remained in outflow following a record movement out in May, the IA said that investors may begin to feel more positive about investing in UK companies as the government continues to promote economic growth.

The inflows in June 2024 included a record monthly inflow of £868m into Europe ex UK sector funds.

The IA’s data showed that Money Market funds saw inflows of £1.2bn in June, while Short Term Money Market funds were the best-selling IA sector for the month with £1.5bn of inflows.

However, fixed income funds saw net retail outflows of £1.2bn during the month, reducing the H1 inflow to £58m.

Responsible investment funds had outflows of £302m in June, bringing the total outflows for the first half of 2024 up to £1.4bn.

“June has seen a return to inflow as investors opted to allocate capital back into equities,” said IA director, market insight & fund sectors, Miranda Seath.

“Investor confidence has been building throughout Q2 2024 as inflation has calmed and, in the UK, we have seen the first base rate cut from the Bank of England since March 2020. This decision could help to improve confidence and flows as we head into the second half of 2024.

“However, recent movements on the global stage on the back of poorer than anticipated US employment data have highlighted the complexities of the macroeconomic environment. Whilst the health of the US economy has implications for all major markets, it’s critical that investors remain focused on long-term goals rather than short-term market fluctuations.

“Investors thrive on greater certainty and in the UK, investor sentiment should be further improved by the new government’s commitment to driving growth and maintaining fiscal responsibility. Following a prolonged period of outflow, we are beginning to see conditions that could give a boost to UK equities as we move into the autumn.”

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