UK investors poured money shares in the run-up to the close of this year’s ISA season, US fund network Calastone has calculated, but not into UK companies.
A net £1.93 billion (US$2.4 billion) flowed into equity funds and £422 million to fixed income funds in April with more than half of inflows coming in the first five days of the month.
Calastone said ISA season inflows this year were “particularly strong” at £5.2 billion from mid-February to April 5 or a nine-year record.
Chancellor Jeremy Hunt recently introduced a new British ISA to encourage more of that investor money into UK-listed shares.
Hunt added an extra £5,000 to the tax-free allowance to encourage UK retail investment to make the British Isa limit £25,000.
UK investors put a record £6.97 billion into equity funds in the first quarter. but the current British investor fixation with the US shows no sign of diminishing.
North American and overseas funds attracted the bulk of the cash while UK-focused equity funds saw a 35th consecutive month of net selling.
“The 2024 bull run in equity markets flies in the face of the uncomfortably bearish signals coming from the bond markets,” said Edward Glyn, head of global markets at Calastone.
“Inflows may have slowed a touch, but they are still well above normal levels as investors chase stock prices.”
An analysis by private bank Shawbrook, meanwhile, suggests a sizeable number of those ISA investors had little or no idea what they were doing or why.
According to Shawbrook only 26% correctly identified the Isa limit of £20,000 a year.
Over a third (36%) believed the limit is under £10,000 per year while 7% were unaware a limit even existed.
A third of savers said they strive to utilise the full Isa allowance each year.
