Retail investors are flocking to cash savings and government bonds as riskier bets lose their attraction, updates from two of Britain’s best-known asset managers suggest.
Funds supermarket Hargreaves Lansdown said growth over the latest quarter was driven by customers switching to its 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 shares and are now providing far better returns than in the recent past.
Stock markets have proved choppy over recent months amid worries about interest rates staying higher for longer. War in the Middle East and the cost of living squeeze have taken a toll.
Low risk: Hargreaves Lansdown said customers are switching to its Active Savings, a platform to access different cash rates offered at banks
Hargreaves reported a slowdown in net new client growth to 8,000 for its first quarter to the end of September, down from 13,000 in the previous quarter.
There was a ‘heightened level’ of withdrawals and a shift towards Active Savings. Share dealing volumes also fell even though it enjoyed a boost from the returns on cash in accounts. I
ts shares slid 6.1 per cent, or 44.6p, to 692.2p.
AJ Bell reported a 10,918 rise in customers in the latest quarter and noted a shift to 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’ve seen across the summer too.’
The company’s stock rose 4.3 per cent, or 11p, to 265.4p.
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