LSEG’s Lipper UK fund report has revealed a September dominated by substantial outflows.
The report notes that September saw net redemptions of £17bn, second only to June 2025’s outflow of £27bn. Substantial outflows took place across multiple asset classes, but equities were hardest hit, with redemptions of £10.4bn – a marked increase on August’s more modest net withdrawals of £2bn.
Equity Global suffered the largest redemptions of any classification at £5.1bn.
September’s redemptions continue a long-term exodus from equity markets, with the asset class not seeing a month of net inflows since April 2026, leading to a net year-to-date “deterioration” of £34bn.
Real estate also saw outflows of £2.7bn, reversing August’s unusually substantial inflow of £2.1bn.
By contrast, bonds achieved a modest net inflow of £1.5bn, their sixth consecutive month of positive flows, with LSEG considering this a “notable” trend given “the pressure on sovereign bonds from rising yields over Q3”.
Mixed Asset GBP Aggressive Global attracted the largest inflows in September of £1.2bn, continuing the classification’s strong showing over recent years.
Bond classifications generally fared best, with Bond Global GBP attracting £758m, followed by Bond Other gaining £543m and Bond Global USD seeing inflows of £485m.
Active funds accounted for most outflows, with £14.6bn leaving active portfolios, substantially more than the £2.4bn exiting passive funds. Money market funds also saw outflows of £3.3bn, almost exclusively from active funds.
Like the equity exodus, active outflows also continue a long-term trend, with year-to-date outflows of £54.3bn.
ETFs continue to defy the outflow trend, with positive inflows of £1.2bn, including equity inflows of £326mn.
See also: LSEG: September brings ‘strong inflows’ to ETFs
Bonds have proven the most attractive passive asset class, with net bond ETF inflows of £708m. Notably, ETF inflows are against a £168m mutual fund decline – suggesting that ETFs are becoming the preferred wrapper for passive bond investments.
Year-to-day, passive funds have attracted £21.9bn, with mutual funds accounting for £14.2bn and ETFs taking £7.7bn. September’s passive equity redemptions have, however, made a substantial dent in equity assets accumulated over the last year.
YTD flows are dominated by bond funds, with Bond Global USD attracting the largest inflows at £7.2bn. Bond Global GBP follows with £3.7bn, while Bond GBP Government has taken £3.1bn.
For equities, Equity Global (excluding UK) ranks second overall, achieving inflows of £5.8bn year-to-date, with passive inflows of £6.9bn more than compensating for active redemptions of £1.1bn.
However, Equity Global has also suffered substantial redemptions of £12.6bn, driven by active outflows of £15.1bn, despite passive inflows of £2.5bn. UK equities also remain deeply unpopular, with Equity UK seeing a £7.1bn decline alongside a similar £6.4bn drop for Equity UK Income. This comes despite recent outperformance and the UK’s potential to act as a diversifier to AI-heavy themes.
