Investors put £278 million into funds in July, a sharp decrease from the £3.6 billion inflow recorded in June, according to data from the Investment Association. Despite this, overall fund flows remained narrowly positive for the month.
The UK experienced the largest fund outflows in July, with a net total of £1.3 billion withdrawn across all asset classes. Retail investors collectively took £1.6 billion out of British equities, marking the highest figure since January 2025. This trend is likely linked to domestic political uncertainty following Andy Burnham's succession of Keir Starmer as prime minister.
While equities saw outflows of £2.1 billion, more retail investors turned to fixed income, which recorded net inflows of £863 million. This marks the fourth consecutive month of inflows for fixed income, with government bonds being the most popular choice.
Miranda Seath, director of market insight & fund sectors at the Investment Association, noted that the composition of flows indicates a more cautious approach from investors, favouring fixed income and mixed asset funds over equities. She suggested that investors are not withdrawing from markets entirely but are being selective and seeking diversified, lower-cost exposure and more defensive allocations.