Net retail UK fund flows were weak in the first quarter of 2026, according to the latest Pridham Report produced by ISS Market Intelligence (MI).
The study recorded around £5bn in net outflows for the first three months of 2026 – a level broadly consistent with the last quarter of 2025 – as geopolitical tensions and market volatility kept investors cautious.
This follows ISS MI’s previous report for 2025, in which it was reported that retail onshore gross sales were up over £10bn, or 5%, year-on-year, with onshore net sales down nearly £10bn.
More than half (56%) of reporting fund groups increased their quarterly onshore and offshore net retail sales in the first three months of 2026, while gross sales finished the quarter in positive territory.
ISS MI said this was largely driven by advisers continuing to reshape portfolios in response to market volatility. In particular, the report noted this highlights a “changing of the guard” with regards to portfolio construction increasingly being outsourced to model portfolio services (MPS) and unitised multi-asset strategies, meaning portfolios are logging a higher turnover in the funds selected.
Benjamin Reed-Hurwitz, report author and head of research development in EMEA and North America at ISS MI, said that fund flows were not moving in one clear direction in the opening quarter of 2026.
“Instead, we saw continued demand for diversification across a broad range of strategies, from emerging markets and Asia equities through to absolute return and money market solutions,” he said.
MPS and multi-asset solutions also continued to attract flows, although the picture underneath those allocations is becoming increasingly nuanced, Reed-Hurwitz added.
“In periods like this, it becomes harder to distinguish between genuinely new money entering the market and ongoing portfolio rebalancing within existing investment structures.”
There has been a notable reshuffling in onshore net sales rankings between the end of 2025 and beginning of 2026.
Vanguard, which placed third at the end of last year, rose to the top of the table for the first quarter of 2026, with £2.6bn of onshore net sales, supported by strong passive equity demand and interest in its LifeStrategy multi-asset range.
Artemis followed with £1.5bn, remaining second in the table. Reed-Hurwitz noted that it was buoyed by record gross sales and strong appetite for its equity strategies.
By contrast, Royal London Asset Management, which topped the onshore net sales table for the final quarter of 2025 after record gross sales driven by short-term fixed income and money market strategies, slipped to 10th place in the three months to start 2026.
Source: ISS MI
Meanwhile, offshore retail net sales continue to serve as an important driver for many fund groups’ sales to UK investors.
“Several of today’s largest fund selectors are looking for the broadest selection of funds possible, leading to interest in many of the best-selling offshore ranges,” Reed-Hurwitz noted.
HSBC topped the leaderboard with £865m in offshore retail net sales, comfortably ahead of Man Group, Legal & General, Schroders and Aegon Asset Management.
Source: ISS MI