UK investors continued to retreat from equity funds in September, withdrawing a net £858m, the 15^th month of outflows in the last 16, according to the latest Fund Flow Index from Calastone, the largest global funds network. Year-to-date, equity funds have suffered outflows of £5.45bn.

UK-focused equity funds remain firmly on the sell list. Investors withdrew £708m during the month, marking the 63rd month of outflows in the last 65. UK-focused funds have shed £47.7bn in that period.

The caution spread well beyond the domestic market, however. North American equity funds shed £124m, their largest outflow since November 2025, while Asian equity funds lost £371m, their second-worst month on record^[1]. European, Japanese, Chinese and sector-focused equity funds all suffered net selling too.

There were two notable exceptions. Global equity funds attracted £410m, while emerging-market funds took in £133m.

Investors turn to bonds and cash

Fixed income continued to attract UK investors. Bond funds enjoyed net inflows of £655m in September, taking the year-to-date total to £3.53bn.

High-yield funds were the clear favourite, attracting £421m. The sector has been the most popular bond category in the last two years, with £3.17bn of net purchases (46% of total bond inflows). Sovereign bond funds also returned to favour, taking in £116m. The inflow comes despite a turbulent period for government bond markets.

Money market funds were a major beneficiary of investors’ caution. They attracted £417m in September, their largest inflow since November.

“Investors are nervous and this is making them very picky. Equities overall remain firmly out of favour, particularly UK stocks, despite relatively resilient market performance. High share prices, surging bond yields and significant geopolitical and inflation concerns mean investors have plenty of reasons to question how much equity risk they want to carry. Inflows to emerging markets suggest a search for diversification – they offer exposure to economies and valuations that look very different from the heavily owned US market, for example.

“September’s global bond upheaval has a range of causes – rising energy prices and therefore inflation fears, weak government finances and competition from corporate borrowers. The resulting higher yields mean losses for existing bondholders, but they also increase the income available to investors buying at today’s prices, making bonds more attractive to new money.

“Money market funds complete the picture. Investors can currently earn a meaningful return on cash without any duration or equity-market risk – a safe haven.

“All this shows that investors still want returns, but they are demanding more compensation for taking risk.

“This month’s Budget is also likely to be a factor in driving rising outflows from equities. Speculation about higher taxes means some investors will be taking profits now.”

Edward Glyn, head of global markets at Calastone, said:

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