So much cash is being taken out of UK equity funds that fund managers are forced to focus on what stocks they need to sell rather than what to buy at the moment, says Deutsche Bank.
Analyst David McCann at the bank says net outflows from the traditional fund sector, which has seen huge outflows and performance pressures since over most of the last 10 years, most likely continued last month.
Data from the Investment Association showed that a net £57 billion net has been withdrawn from mutual funds since the summer of 2016, or around 24% of the assets under management (AuM) by funds at that time.
AuM in the eight years since has declined 21%.
The latest data just published by the IA showed net outflows were eased off to around £1 billion for June, making a total of £7.6 billion so far this year, around 4% of the opening AuM at the start of January.
Based on proprietary analysis by the Deutsche Bank team, heavy net outflows are estimated to have continued in July rather than the improved June level.
"Funds are very much on the back foot," said McCann in a note to clients this morning, with managers "typically more concerned with managing the outflows / maintaining adequate associated liquidity / deciding what stocks to sell / how to keep the portfolio in balance, rather than more proactively thinking about what to buy."