Asset managers saw net inflows of £2.4bn from UK investors in February, a near fourfold increase on the £662m recorded in January, according to Investment Association (IA) data.
The figure represents the highest level since the £3.2bn logged in May 2025.
In what has become a rarity, actively managed funds saw larger net inflows than index trackers, at £1.5bn versus £890m.
The IA said investors favoured fixed income funds over equity during the month.
Equity funds saw overall outflows of £465m, though UK investor demand varied significantly by region and sector. North American equity funds saw a resurgence, with net sales of £417m.
Global equity outflows rose to £808m while global trackers posted outflows of £236m.
UK equity outflows were £238m, the smallest fall since June 2021.
Fixed income funds had inflows of £824m, up from £444m in January. The IA Strategic Bond sector was the best performer with a £175m inflow.
Money market fund inflows were £551m, while mixed asset funds recorded inflows of £1bn.
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The context to this is that the month saw relatively positive economic conditions, with inflation in the UK continuing to fall and generally positive equity market performance.
The war in the Middle East did not break out until the last day of February, by which time markets had already closed for the month.
Miranda Seath, director, market insight and fund sectors at the IA, said: “February marked a fourth consecutive positive month for net retail sales, with inflows reaching £2.4bn. Investor confidence has been gradually rebuilding.
“While some hesitancy towards equities remains, investors are selectively re-entering the US market through equity trackers, whilst continuing to allocate to European and global emerging market equity funds.
“Fixed income remains in favour as investors continue to manage risk. Money market funds continued to attract inflows, which also reflects a more risk-off positioning,” she continued.
“Investors have been cautious, the impact of AI on business models across the technology and knowledge-intensive sectors, which are a significant weighting on US indices, remains a factor but the US stockmarket performed well through 2025 and this has helped a return to inflow.
“Looking ahead, investors will be watching geopolitical developments, including the evolving situation in the Middle East and its potential implications for energy prices and inflation.”
