Passive equity funds suffered net outflows in October for the first time since August 2023, according to Calastone’s latest Fund Flow index. Investors pulled £44m from funds that track a market index, as total outflows from equity funds rose to £1.4bn.
Active funds lost £1.4bn. Equity funds overall have seen outflows in 16 of the past 17 months, according to the study, with the October figure up from £858m in September, reaching the ninth-largest monthly outflow on record and the third-largest this year.
Buy orders fell by £586m compared with September, while sell orders were down £38m, or 0.3%.
Edward Glyn, head of global markets at Calastone, said: “Buyers stepping back did more damage to equity fund flows in October than sellers heading for the exit. That distinction reveals a weak appetite to commit new money, rather than a rush to liquidate investments. Even perennially popular passive funds could no longer buck the trend – the general reduction in equity allocations is finally hitting them too.”
Net flows of equity funds
Source: Calastone
UK funds led the withdrawals, shedding £815m and taking their outflows for the year so far to £5.3bn. Investors withdrew £229m from global funds, £69m from Japanese funds and £65m from European funds. North American funds shed £164m.
Emerging market funds took in £131m. They were the only equity category with inflows in October and the only one to attract money in each of the past three months.
Contrary to previous years, the flows did not show any Budget effect.
Calastone’s daily figures showed heavy trading around the Budget in 2025 and 2024, as investors sold equity funds to lock in profits before a feared rise in capital gains tax, which is charged on profits made when assets are sold, but this wasn’t the case last month.
Glyn said: “In a welcome change from recent form, the Budget left little immediate trace. We saw no discernible change in investor activity on the days immediately before or after the announcement, unlike the previous two years.
“Because October’s higher outflow was driven by a lack of buyers, not an increase in selling, it does not suggest a repeat of investors rushing to crystallise gains ahead of a feared capital gains tax increase. Reports before the Budget that a rise had been ruled out may have removed one reason to act.”
In their ninth consecutive month of outflows, environmental, social and governance (ESG) funds lost £754m in October. Investors have withdrawn £5.1bn from ESG equity funds this year.
Among the strategies registering positive inflows, bond funds took in £302m, down from £655m in September. Money market funds, which hold cash-like short-term loans, attracted £516m, their strongest inflows since the Budget-related surge in November 2025.
Finally, property funds recorded a third consecutive month of inflows. October’s £127m was their best result since August 2018, when they attracted £186m. Glyn said three positive months were “an early indication rather than proof of a lasting recovery”.