Investors have pulled £927m from equity funds in February, marking the ninth month of consecutive outflows from the asset class, according to the latest Calastone Fund Flows index.
This marks the worst month for equity flows since November 2025, when Budget uncertainty led to UK investors pulling a net £3.6bn from the sector.
See also: Calastone: Budget ‘plays havoc’ with investors amid £3bn equity fund outflow
In total, equity funds have seen outflows of net £12.2bn from equity funds since June 2025, reversing almost a year of inflows.
The February stat was based more on investors withdrawing capital when the market was weakest, with the level of buying remaining relatively stable, according to the report.
Edward Glyn, head of global markets at Calastone, said: “Investors seem to have got a taste for selling and are looking for reasons to pull money out of funds.
“Investors are sitting on large capital gains, and it seems nerve and volatility are driving them out of equities.”
The outflows were overwhelming in active funds, which investors yanked £1.5bn of money from, marking the 14th consecutive month of losses for actively managed strategies. Meanwhile, passive funds attracted an extra £571m and have been on a streak of unbroken inflows since August 2023.
According to Glyn, this is because active fund managers attract investors who “are making a choice” by consciously selecting a manager, a style or thesis. “That often comes with higher engagement, more switching, and a willingness to react when the news shifts,” Glyn said.
Outflows were strongest in the UK Equities sector, where funds were down £555m. This came despite the UK’s FTSE 100 rising 6.7% to a record high, while the mid-cap FTSE 250 and Deustche Numis Smaller Companies extended rose 2.3% and 1.1%, according to FE analytics.
Global funds meanwhile experienced £518m in outflows, despite the MSCI World finishing the month “more or less where it started”, said Glyn. According to FE Analytics, the global index even finished the month up 2.8% in sterling terms.
This indicated that while February was a volatile month for stock prices, as companies panicked about AI disruption to their business models – “We are not in a bear market, even if some pockets are being punished.”
Specialist sector funds also experienced £284m in outflows, with technology funds representing three fifths of the loss (£162m).
Meanwhile, after two months of next inflows, ESG funds were unable to maintain their momentum in February. Sustainable funds slid by £462m, after investors poured more than £380m into the assets over December and January.
See also: Sustainable fund outflows slow in Q4
Property funds posted another month of slight outflows, down by £20m compared to their £51m loss in January.
Other asset classes experienced inflows, with multi-asset funds attracting a new £1.5bn, while fixed income funds increased by £453m. A further £105m also flowed into money market funds.
