Source: Sharecast
According to the latest fund flow index from funds network Calastone, investors withdrew £1.2bn in September, taking the third quarter total to £3.64bn. It was the highest quarterly outflow in the 11 years Calastone has been compiling the index.
As a result, equity funds overall have seen just £126m inflow in the year-to-date, compared to £22.7bn in the same period a year previously.
Edward Glyn, head of global markets at Calastone, said: "It is really unusual to see markets reaching record highs while investors are moving decisively for the exits across such a broad range of funds.
"Frankly, nobody knows when the next market correction is coming, or even if one is imminent. Some parts of the US market in particular do seem to be exhibiting signs of irrational bubble behaviour, particularly those perceived to benefit from the AI boom."
Despite widespread economic and geopolitical headwinds this year and record demand for gold - a traditional safe haven asset - stock markets around the world have continued to rise.
So far this year the Dow Jones has put on 11%, while the Nasdaq 100 is 19% higher.
In Europe, the FTSE 100 has risen on 15%, while the CAC 40 is 8% higher - despite the political turmoil engulfing France - and the Dax 40 is 22% stronger.
In Asia, the Nikkei 225 is ahead 22% while the Hang Seng has soared 38%.
Yet despite this, every major equity-fund sector except European-focused funds saw outflows in September, Calastone noted.
Global funds shed £203m - the fourth consecutive month of net selling - while UK funds lost £691m and North American funds were down £146m.
In contrast, investors in European funds added a net £203m to their holdings. It was the fifth consecutive month of inflows.
Glyn said: "UK-focused funds continue to shed capital, but selling has been more muted in the last four months in the context of a general pull-back from equities.
"Doubtless, seeing the UK market reach record levels while still not looking expensive has given some sellers pause for thought.
"Only Europe is benefiting most clearly from a rotation towards lower valued stock markets."
