In the months leading up to the first Budget under the new Labour government, many in the MPS industry were told to prepare for a world with less leniency towards capital gains allowances.

Asset Allocator did wonder whether new legislation would trigger a rush of activity among investors seeking to avoid higher tax rates, and we've come across some data that supports the idea. 

Fund network Calastone found in its latest flows survey that investors sold more than £2.7bn of equity holdings in October, with every single region in the red. 

But buying activity also jumped 20 per cent month-on-month, signalling a whiff of rebalance activity taking place before Reeves delivered her speech to Parliament on October 30.

And, interestingly, they discovered the following:

“Outflows ceased entirely on Budget day when higher capital gains tax rates came into immediate effect – sell orders dropped by an astonishing 40 per cent overnight compared to Wednesday, October 29.

"The startling change in behaviour between October 29 and Budget day is a clear indication that tax was the main motivation for all this activity.”

It may come as little surprise to note that UK equity funds once more bore the brunt of the sell-offs, with £988mn of the total pulled from domestic mandates. On top of that, a further £733mn exited equity income funds, which are heavily skewed towards the UK market. 

However, global funds saw their first outflows in over two years, which evidences the indiscriminate nature of the sell off. 

Additionally, investors opted to pile £631mn into fixed income, plus a further £402mn into money markets over the month, leaving Calastone managing director Edward Glyn to draw the conclusion that the current outlook for UK interest rates maintains the appeal of yield-generating assets for a while longer.