Equity fund outflows surged to £1.4bn in March as the war in the Middle East drove investors to pull capital from risk assets, according to the latest Fund Flow Index from Calastone.
The outflows marked the worst month since November 2025, when UK Budget concerns prompted significant selling, and extended the run of equity fund redemptions to an unprecedented 10 consecutive months. March was the seventh-worst month on record for equity fund outflows.
Source: Calastone
Selling was broad-based across regions, with investors pulling the money from Europe, Asia-Pacific, emerging markets and Japanese funds. All logged dramatically higher outflows or went from inflows to redemptions. North America funds were the only ones to record inflows, though these fell sharply from £371m in February to just £99m in March.
UK-focused funds logged the largest outflows in cash terms at £592m, though the month-on-month increase from February's £555m was modest. Calastone said UK funds remain subject to structural outflows but the relative position has improved markedly in recent months.
Global equity funds, a perennially popular sector, also suffered net selling of £205m – less than half February's level but still only the eleventh month in Calastone's 12-year record that the sector has experienced net redemptions. Eight of those months have occurred in the past year.
Edward Glyn, head of global markets at Calastone, 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.”
He added that, while some investors are pulling capital from risk assets into cash, the overall sentiment is not one of panic. “Although there are notable outflows at the margin, most are content to stay invested knowing that most crises look like blips through a long-term lens.”
Since June 2025, equity funds have logged net outflows totalling over £12bn, reversing more than a typical year's worth of inflows during a period marked by US tariffs, AI disruption fears and Middle East conflict.
Turmoil in bond markets meant fixed-income funds failed to benefit from the rush of cash exiting equities. With yields rising globally on oil-shock inflation fears, investors withdrew £535m from bond funds, more than reversing February's inflows. March was the worst month for fixed-income funds since April 2025 and the seventh worst on record.
Source: Calastone
Safe-haven money market funds recorded inflows of £228m, their best month since the Budget. This is reflected in latest interactive investor data, showing four different money market funds featuring in its top 10 list of most bought active funds in March. These included Royal London Short Term Money Market, Fidelity Cash Fund, Vanguard Short-Term Money Market Fund and abrdn Sterling Money Market.
Mixed-asset funds, which are anchored in monthly savings plans, also continued to see inflows.