Investors pulled £697m from equity funds in January, the eighth consecutive month of net selling as tensions over Greenland reached a boiling point, according to the latest Calastone Fund Flows index.
UK and European equity funds bore the brunt of the decline, with £237m pulled from European funds and £694m removed from UK funds. Asia-focused funds also experienced outflows, but these were more in line with monthly averages, based on Calastone data.
This flight from equity funds was largely attributed to the developments in Greenland. Part of this is the timing, with the first half of the month having outflows and inflows “roughly in balance”.
Indeed, European equity funds attracted £10m in the first week of January and £9m in the second week, as seen by the chart below.
The prospect of US tariffs on the UK and Europe for sending military planners to Greenland caused stockmarkets globally to dip, with the FTSE All Share and German DAX both opening down on 19 January.
See also: Markets fall on Trump’s Greenland tariffs threat
Following this, outflows from equity funds accelerated, with European funds down by £149m and UK equity funds down by £246m in the third week of January.
By contrast, markets that were more insulated from tariff threats, such as emerging markets, global and North American funds, attracted new money in January.
Edward Glyn, head of global markets at Calastone, said this was a slower pace of outflows than in the run-up to the Autumn Budget, when investors were concerned over higher pensions and taxes.
“This indicates that the risk of conflict over Greenland was more of a tail risk in investors’ minds rather than a clear and present danger,” he said.
“It shows, however, that it doesn’t take much to fracture fragile sentiment, especially when stock prices are riding this high.”
The picture for other asset classes was more mixed. Mixed asset funds were up £1bn, less than the £1.8bn they attracted in December 2025 but still in line with 10-year monthly averages.
See also: Calastone: 2025 marks worst year in over a decade for equity fund flows.
Fixed income funds attracted almost £459m of new money, despite outflows from sovereign bond funds.
Finally, money market funds and property funds both experienced slight outflows (down £48m and £51m respectively).
