Bringing you live news and features since 2006 

Edward Glyn, Calastone

Brexit drives GBP62 billion offshore as UK fund investors flee to Dublin and Luxembourg, says Calastone

RELATED TOPICS​

UK investors have moved a net GBP62 billion of their fund investments outside the UK since the Brexit referendum in June 2016, according to the latest Fund Flow Index (FFI) from global funds transaction network Calastone.

In March 2019 alone, as the UK Parliament teetered on the brink of a no-deal Brexit, they placed a net GBP2.7 billion in EU-based funds, almost three times the amount that flowed into UK regulated funds.
 
Almost all of this GBP62 billion in capital is now invested in funds based inside the European Union. Dublin has been the biggest winner taking two thirds of the total, equivalent to almost GBP42 billion. Luxembourg has taken almost all of the rest, just under GBP20 billion. Other jurisdictions saw negligible inflows.
 
In the eighteen months ahead of the Brexit referendum, UK investors placed a mere GBP2.5 billion offshore (compared to GBP62 billion since the referendum). In that period, for every GBP14 invested in UK-domiciled funds, only GBP1 went offshore, a ratio of 14:1. Since the Brexit vote, that ratio has shrunk to 1.5:1.
 
In the last six months, more UK investor capital has flowed into offshore funds than it has into UK-domiciled ones, GBP9.5 billion compared to GBP7.5 billion.
 
Flows offshore have been across all asset types, reinforcing the notion that it is the choice of jurisdiction inside the EU and outside the UK that is the key determinant, rather than simply to do with the investment propositions available.
 
Edward Glyn (pictured), Calastone’s Head of Global Markets, says; “Dublin and Luxembourg have been the real winners from the UK’s decision to quit the EU. Before the Brexit referendum, there was relatively busy two-way trade in offshore funds, but the net amount that flowed offshore was extremely small. Since June 2016, the picture has changed completely as a wall of UK investor money has fled from the UK to Dublin and Luxembourg, where it will remain inside the EU’s regulatory jurisdiction once the UK leaves the union. Big political events have clearly influenced investors: flows offshore have risen markedly at key moments of instability connected to the Brexit story. Institutional and high-net-worth individuals are mainly responsible for the trend; smaller retail savers remain focused on UK-domiciled funds, suggesting that more sophisticated investors have the greatest concern about the consequences of Brexit.”

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by