UK-focused funds were hit the hardest of any sector, seeing record outflows of £8.5bn and outflows during every month of the year, data from Calastone revealed.
Europe-focused funds recorded a fourth consecutive year of net selling, with £2.3bn in outflows, while Asia-Pacific funds saw £1bn in outflows.
North American funds experienced their first year of outflows since 2016, with a record £1.2bn in outflows.
Passive funds also suffered their first year of outflows on record and performed below active funds for the second year running, seeing £4.5bn in outflows compared to active’s £1.8bn.
Fundsmith Equity sees out 2022 as most bought fund
However, global funds bucked the trend with £4.9bn in inflows, driven near entirely by ESG strategies, with global ESG equity funds bringing £6.4bn in inflows. Emerging market funds also saw inflows of £547m.
While equity income funds lost £427m over the year, this was the sector’s best year in Calastone’s record, a tenfold decrease in outflows compared to 2020 and 2021.
Edward Glyn, head of global markets at Calastone, said: “Fund management groups were hit with a double whammy – the supply of capital shrank as bond and equity markets fell, and the replenishment rate either reduced or went into reverse as investors either slowed their buying or fled for the safety of cash.
“The resulting reduction in assets under management brought a significant hit to revenue. Nevertheless, with more of the pain focused on outflows from index funds, whose fees are lower, there is a trace of silver in the lining for active fund houses.”
BlackRock defers Q3 redemptions from £3.5bn UK property fund
Meanwhile, property funds saw their lowest outflows since 2018, with only £535m being withdrawn throughout 2022, compared to £2.1bn the year before. Two months, June and July, saw inflows for the sector, before outflows peaked in October following the Mini Budget.
This was driven mainly by a 58% fall in sell orders compared to the year before, however buy orders rose by 12%.
