New data from the Investment Association (IA) reveals that June saw non-professional investors inject a net £3.8bn into funds, the highest amount recorded since August 2021. This surge contributes to the overall growth of the UK fund industry, which managed a record £11.1tn in 2025.
Several factors may be contributing to this increase. Global stock markets have reached record highs in the past year, despite ongoing conflict in Iran and recent sell-offs of AI stocks. This trend, coupled with a UK government campaign encouraging first-time investors, could be driving momentum among retail investors.
Specific sectors within funds have seen significant increases in recent months. Short-term money market funds, which hold high-credit-rating debts from governments or companies, saw a net inflow of £917.1m in June. These funds are often used as a low-risk, easily accessible alternative to cash, offering returns similar to higher-paying savings accounts.
Additionally, £837.6m was directed into North America funds, primarily focusing on the US stock market. The reduction of the cash ISA limit for under-65s from £20,000 to £12,000, effective next April, has led some to consider money market funds within a stocks and shares ISA as a low-risk cash alternative. However, returns from money market funds in a stocks and shares ISA would be subject to a 22% tax.