On Tuesday, financial network Calastone reported that U.K. investors bought money market funds at the fastest rate since last year’s failed “mini-budget.”
Calstone’s fund flow index indicated net inflows to money market funds of 419 million pounds ($521 million), the highest since October 2022, when then-prime minister Liz Truss announced short-lived economic plans.
Environmental, social, and corporate governance equity funds lost 304 million pounds, the lowest month on record. Calastone said May was the second month with net selling in over five years.
After several banks collapses, money market funds worldwide have witnessed enormous inflows, particularly in the U.S.
“Money market funds invest in bonds with very short maturities, so they are typically among the least risky assets available,” said Edward Glyn, head of global markets at Calastone.
“Wobbles in the U.S. banking system have reminded investors of the risks of having bank deposits above insured thresholds too, leaving money markets an obvious place for wealthier individuals to park surplus cash.”
Volatility slowed U.K. bond market investment. Calastone said investors invested 318 million pounds in the month, half last year’s average.
After high March and April inflows, equity funds lost 302 million pounds. UK-focused funds lost 583 million pounds.
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