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Investors pull US$1.5b from UK equities as Brexit bites

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Canary Wharf financial district of London. Savers jettisoned £1.2 billion(S$2.04 billion) from UK equity funds in July, when Prime Minister Boris Johnson took power, according to figures published Thursday by the Investment Association, which represents fund managers.

[LONDON] Investors are voting with their feet as the Brexit impasse plays havoc with financial markets.

Savers jettisoned £1.2 billion(S$2.04 billion) from UK equity funds in July, when Prime Minister Boris Johnson took power, according to figures published Thursday by the Investment Association, which represents fund managers. The withdrawals accelerated after outflows of £744 million  in June.

"Investors reacted to the ratcheting up of uncertainty in the UK, triggered by the change in political leadership," said Chris Cummings, chief executive of the Investment Association. "Savers looked to weather the ongoing political and economic uncertainty by diversifying their investments and seeking out safe haven assets."

The outflows came despite a positive month on the equity markets: in July, the CBOE UK All Companies Index rose 1.9 per cent.

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Instead, investors poured money into bonds. There were £2.2 billion in net retail sales in July, the fifth straight month of positive flows.

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