Fund outflows surged to £1.4bn in March, the worst month for fund flows since November 2025 when the UK budget drove selling, according to data from Calastone’s most recent fund flow index.
This was up more than £500m since February and was the seventh worst month for flows in Calastone’s 12-year record but was still more than £2bn below the £3.6bn investors pulled in November.
Edward Glyn, head of global markets at Calastone, said that despite geopolitical conflict, “The overall sentiment is not one of panic and outflows are still well below the levels caused by the Budget speculation – when retirees liquidated assets to beat a feared tax increase.”
Around £2.4bn of this wall was pulled from actively managed strategies, compared to the nearly £1bn added to passive funds. This continues a string of active underperformance in Calastone’s data since December 2024.
Selling was broad-based across equity markets, with only one sector (IA North America) experiencing inflows of £99m in March. While this was positive in absolute terms, it was down from the £371m of inflows in February.
See also: Calastone: Equity funds experience ninth month of consecutive outflows
UK equities were the worst in cash terms with £592m pulled from the asset class in March. This adds another month to the string of outflows from the asset class since November 2024.
That said, it was only a “modest increase” from February, when the asset class was down £555m, according to the report.
Global funds also experienced net outflows of £205m. While this was lower than the number in February, it is the eighth month in the past year where the usually popular sector has faced outflows, according to the data.
European, Asia Pacific, emerging markets and Japanese funds were hit with surging outflows or a reversal from inflows to selling, reflecting the biggest decline in investor optimism.
However, the money being pulled out of equity funds did not go into fixed income funds, due in part to turmoil in bond markets as geopolitical conflict escalated, the report said.
“With yields rising around the world on oil-shock inflation fears (and therefore bond prices falling), investors withdrew £535m of capital from bond funds, more than reversing February’s inflows,” the report noted.
This was their worst month since April last year, when fixed income funds shed £1.2bn as conflict around ‘Liberation Day’ escalated.
By contrast, a few areas managed to attract some money in March. Some £228m went into money market funds last month, and more than £1.3bn was deposited into mixed-asset strategies, according to data from Calastone.
Glyn said: “Financial markets do not simply set prices – they are probability engines weighing the likelihood of future events.”
“This helps explain why market movements, though large, have been relatively modest given the potential extent of the damage the oil crisis could have on the world economy.”
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