Retail investors are flocking to cash savings and government bonds as riskier bets lose their appeal, updates from two of Britain’s best-known asset managers suggest.
Funds supermarket Hargreaves Lansdown said growth over the last quarter was due to customers switching to Active Savings, a platform to access different cash rates offered at banks.
And rival AJ Bell said investors have been stocking up on government bonds, which are much lower risk than stocks and now offer much better returns than in the recent past.
Stock markets have been choppy in recent months amid concerns that interest rates will stay high for longer. The war in the Middle East and the declining cost of living have taken their toll.
Low risk: Hargreaves Lansdown said customers are switching to Active Savings, a platform to access different cash rates offered at banks.
Hargreaves reported a slowdown in net new customer growth to 8,000 in its first quarter to the end of September, down from 13,000 in the previous quarter.
There was a “higher level” of withdrawals and a shift towards Active Savings. Share trading volumes also fell, although they enjoyed a boost from returns on cash in accounts. Yo
Shares in ts fell 6.1 per cent, or 44.6p, to 692.2p.
AJ Bell reported an increase of 10,918 clients in the latest quarter and noted a shift towards safer investments.
Laith Khalaf, its head of investment analysis, said: “Five of the ten most popular investments in September were government bonds… and this is a trend we have seen over the summer as well.”
Shares in the company rose 4.3 per cent, or 11 pence, to 265.4 pence.