6bn Switched to Safe Haven Funds

6bn Switched to Safe Haven Funds.

You are not alone. Figures released by financial records data group Morningstar have suggested that £6 billion flowed out of UK stock market and stock market funds since the Brexit vote.

In addition, given the anticipated slowdown in the UK economy many fund managers saw investors pulling away from commercial property with just under £0.5 billion flowing out of property funds. This resulted in many property fund managers suspending trades in their funds to protect existing investors. Some also devalued the property assets held inside the funds meaning that investors suffered a downward price adjustment. Property funds are illiquid i.e. you cannot buy or sell a huge commercial office block or trading estate or warehouse unit quickly. This means that property fund managers had to take action to manage cash flows out by suspending their funds.

Where has all the money gone?

Many cautious investors have moved to "cash park" funds or to safe haven investments such as gold and we have already seen significant gold price rises over the last few months.

Our view is that any investor is not a high-risk investor should remain cautious for now. Yes, you may miss out on some growth but when the market turns downwards it will move very quickly and you may not be able to disk invest in time. We have a saying at this firm and eat is "you can only con a greedy person". In the words of Warren Buffett, one of the world's most successful investors "when people are fearful that is the time to be greedy and when people are greedy that is the time to be fearful". Right now, we believe there is too much greed out there and we are perfectly happy to wait for the right time to reinvest.