LONDON (Reuters) - Flows into British-based equity funds hit five-year highs in the fourth quarter on hopes coronavirus vaccines would give further legs to the global rally that emerged from the COVID-19 market crash of March 2020, data from fund network Calastone showed. Equity fund net inflows totalled 4.6 billion pounds ($6.26 billion) in Oct-Dec 2020 and inflows in December were 2.4 billion pounds as stocks reached record highs globally. “The corona-coaster year for equity funds ended on a high as rock-bottom interest rates and the prospect of mass vaccination boosted both stock market valuations and the appetite to hold shares”, Edward Glyn, head of global markets at Calastone, told clients. Since their mid-March 2020 lows, world equities have surged about 75% and the consensus views among analysts are that a correction isn’t yet in sight despite warnings of speculative bubbles in some market segments. Calastone’s findings are in line with other companies tracking financial flows and that have reported a surge in investments during the last quarter if 2020. “Since November, equity funds globally have attracted over $200 billion, reversing 60% of the outflows suffered from earlier in the year”, Citi analysts said in a Jan. 6 note, citing data from EPFR. Unusually, most flows were into active funds, rather than index-tracking passive ones, Calastone said on Wednesday. Active fund managers have lost out to cheaper passive funds in recent years, but demand for environmental, social and governance (ESG) strategies have given them a new lease of life. However, funds with a UK focus did badly as investors feared Brexit without a trade deal, a situation averted only in late December. Funds investing in UK assets saw 600 million pounds in outflows in the last quarter, although inflows for the year as a whole totalled 117 million pounds. “Markets with high growth characteristics like Asia, emerging markets and the U.S. have benefited most from the uplift in valuations and this is reflected in fund flows too,” said Edward Glyn, head of global markets at Calastone. “Those with low growth characteristics and a high yield, like the UK, have been left far behind.” Calastone data shows a clear underperformance of equity funds that focus on the UK: Overall, funds investing in all asset classes saw 33.8 billion pounds in net inflows in 2020, up 32% from 2019. More than two-thirds of UK-based fund flows by value pass across the Calastone network each month. ($1 = 0.7353 pounds)