Inflows of £507m in March were not enough to prevent Investment Association funds from a £3.9bn net retail outflow in the first quarter of 2025, according to the IA’s latest fund flows report.
The data, which runs to the end of March, does not show the full extent of April’s market movements following Trump’s tariff announcements on 2 April, though the direction of flows into money markets suggests investors took a ‘wait and see’ approach ahead of the trade policy changes.
A net £1.2bn was placed into money markets, while investors ditched bond funds, recording a £1.3bn outflow in March after a £159m inflow in February.
See also: UK investors pull net £1.24bn from bond funds in April amid market storm
Corporate bond sectors bore the brunt of the net selling, with £1.2bn pulled from the sectors. Meanwhile, Mixed asset sectors saw inflows slow to £149m, down from February’s £397m.
Equity funds recorded their first month of inflows for the year, with investors buying a net £535m. North America was the top sector for inflows despite the uncertainty around trade policy.
“Q1 was no easy ride for investors and outflows suggest that we’ve seen a drop in confidence following the more positive end to 2024,” Miranda Seath, director, market insight & fund sectors at the IA, said.
“While markets were initially buoyed by Trump’s victory in the US, volatile policymaking and uncertainty around the future of global trade make it challenging for investors to make clear cut decisions. This is reflected in the notably strong inflows into money market funds in March, as investors take a ‘wait and see’ approach.
“This uncertainty shows no sign of abating as investors await the full impact of the fallout from Trump’s global tariffs. Recognising the key headwinds and tailwinds for global markets, many investors will carefully assess their next move.”