LONDON (Reuters) – British investors piled into U.S. stocks in the weeks leading up to President Donald Trump’s announcement of a barrage of trade tariffs last week that sent stocks tanking, funds network Calastone said on Tuesday.
North American equities – comprising mainly of U.S.-focused funds – netted 1.8 billion pounds ($2.3 billion) of inflows from UK investors in March, their third-best month in the 10-year data set, as investors tried to “buy the dip” following a weak start to the year for U.S. shares, Calastone said.
A seasonal shift into stocks in the UK every March – to take advantage of tax breaks ahead of the end of the UK’s tax year on April 5 – also helped fuel the buying.
“The strong appetite for US equities in March is at odds with tidal forces in global markets that are seeing a strong rotation out of US assets and into markets like Europe and the UK,” said Edward Glyn, head of global markets at Calastone.
U.S. stocks were already down year-to-date prior to Trump’s tariff announcement last Wednesday, but those declines turned into a dramatic drop in subsequent days as investors dumped equities.
Stock market downturns have increasingly attracted retail investors looking to “buy the dip”. Retail investors bought $4.7 billion in stocks last Thursday, the highest level over the past decade, JPMorgan said in a note on Friday.
Trading volumes both in and out of U.S. stocks were much larger than usual in March, Calastone said, suggesting disagreement among investors over prospects for the U.S. market, which has outperformed rivals in recent years.
Equity funds overall saw net inflows from UK investors of 1.4 billion pounds in March, despite investors pulling a net 1.2 billion pounds from UK equities, according to Calastone’s data.
Investors also withdrew a net 700 million pounds from bond funds in the month, while safe-haven money market funds attracted 513 million pounds of new cash.
($1 = 0.7813 pounds)
(Reporting by Iain Withers; Editing by Tommy Reggiori Wilkes and Sharon Singleton)
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