UK investors withdrew £315m from equity funds in August, the 14th month of outflows in the past 15 months, according to the latest Fund Flow Index from Calastone.
The outflow was smaller than July's £1.6bn but marked a fourth consecutive month of net selling. Investors have now pulled £15.2bn from equity funds since June 2025.
Such prolonged outflows from equity funds are “incredibly rare”, according to Edward Glyn, head of global markets at Calastone, who said there is “a huge built-in bias towards fund inflows as UK households add to their savings over time, and equity funds have traditionally been big beneficiaries”.
Net flows of equity funds
Source: Calastone
Selling was concentrated in UK equity funds, where £601m was removed, and European equity funds (£145m). Investors pulled £52m from Specialist sector funds.
North American equity funds saw their first outflows since November 2025, though at £3m it amounted to less than 0.1% of the combined buy and sell orders for the month.
“Investors aren't panicking, but they are stubbornly refusing to chase equity markets higher,” Glyn said.
“August's outflow was much smaller than July's, but the pattern is now well entrenched. With markets near record highs, investors may have reservations about where equities go from here.”
Bond funds attracted £407m in August, the fourth consecutive month of inflows and broadly in line with the 12-month average.
Money market funds, which invest in short-term, low-risk debt and are typically used by investors as a cash-like holding, saw a sharper rise in demand. They took in £364m, double the 12-month average and their strongest month since November.
Together, bond and money market funds absorbed £771m in August. Since equity outflows began in June 2025, the two asset classes have taken in £8.7bn combined.
Glyn linked some of the caution to the upcoming Budget and the “continuous speculation” around it.
“Investors believe capital gains and pension tax breaks are in the firing line; some of them have a reason to act now rather than risk delay.”
He added that cash is “doing more of the talking”, with four in five savings accounts managing to keep pace with inflation, even with the latest consumer price index running higher.
“When investors can earn a decent return without taking equity risk, there is much less pressure to chase the market. They can afford to sit on the sidelines and wait for a better reason to buy”.