Omicron Prompted Abrupt Selling of Equity Funds

Indexes Show Large-Cap Strength

The arrival of Omicron in November prompted abrupt sales of equity funds, our latest FFI shows. As governments slapped new restrictions on travel and reimposed mask mandates, investors reacted swiftly, selling £83m of their equity fund holdings on Friday 26th and Monday 29th November. The overall volume of transactions leapt by 60% between Thursday and Monday as investors adjusted their holdings to reflect their first assessment of this latest episode of the pandemic.

Key highlights from this month’s FFI:

  • Omicron’s arrival prompted abrupt selling of equity funds at the end of November to the tune of £83m over a two-day period
  • A sharp increase in trading volumes indicated significant investor uncertainty
  • But it’s too soon to judge the impact of the new variant – Calastone expects more volatility in the coming weeks
  • For the whole month of November, equity funds saw inflows thanks to record buying of ESG funds
  • But record inflows to ESG funds disguised rising risk aversion – Calastone saw record outflows from North American and European equity funds as well as strong selling of UK-focused funds
  • Risk aversion saw switching into safe-haven money-market funds

To read further insights from the FFI, please click through this link.

Source: Calastone

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