Brexit has caused investors to seek refuge from uncertainty as they poured more than £50bn into offshore funds following the referendum, according to transaction network Calastone.
Since June 2016, a cumulative £53.1bn has flowed offshore, according to Calastone, which based the figures on fund orders across its transaction network.
The firm handles two-thirds of UK fund orders each month by value and says its newly launched Fund Flow Index (FFI) currently displays UK investor sentiment at its lowest level since just after the 2016 Brexit referendum.
“The sea change in appetite for offshore funds is clearly linked to Brexit: the expected loss of passporting for the UK’s financial services industry, coupled with uncertainty about the UK’s regulatory future, and nervousness about Britain’s unstable political situation, have driven investors to move capital outside the country,”” Calastone managing director and head of global markets Edward Glyn said.
Institutions are leading the “concerted shift” towards offshore funds, the firm said, although wealthy investors are also significant. In the year prior to the vote, a monthly average of £150m was sent offshore – but that figure now stands at an average of £1.9bn.
Similarly, a version of the FFI that tracks offshore flows registered an average of 50.5 points from the beginning of 2015 until May 2016, meaning there were almost no net flows offshore. But since June 2016 the figure has risen to 55.8 points as offshore flows increased.
In October, figures from the Investment Association showed total outflows from UK equity funds since the Brexit referendum had reached £10bn.