Were Investors More Worried About Brexit Than Lehman Brothers’ Fallout
Britain’s individual investors were even more spooked by the Brexit than they were when the 2008 financial crisis occurred. That’s according to figures from the Investment Association.
According to the group, consumers removed $4.6 billion (3.5 billion pounds) from the U.K. funds in June, which is more than the 493 million pounds they took out in October after the Lehman Brothers’ collapse.
Another thing that suffered was the property funds, which had a 1.4 billion pounds outflows. After Britain had voted to leave the EU, seven money managers had to quit trading in real estate funds, which caused investors to remove their money.
The Brexit vote, which occurred on June 23, caused the FTSE 250 index to drop more than 10 percent in trading over two days. In July, most of those losses had been recouped, which means anxious investors that took their money out missed out.
With the new government quickly coming together after the Brexit vote, the outflows stabilized during July. Of course, people should not be lulled into a false sense of security, thinking everything has gone back to normal, and there’s no longer a risk to the market.