03 April 2025 – Outflows from funds eased to £562 million in February, following January’s £3 billion outflow, according to data published by the Investment Association (IA) today. However, investors face into increasing macro-economic uncertainty, as Trump’s tariffs shift from rhetoric to reality.
Key findings for February
Equities continued to dominate outflows with investors taking out £1.6 billion, primarily from UK equity funds, which experienced a £1.4 billion outflow.
Mixed Asset funds saw a £409 million inflow, the highest since January 2023 (£493 million) as investors looked to diversify their investments in an uncertain environment.
The IA Global sector was the highest selling sector with net retail sales of £552 million.
Modest fixed income inflows have continued with net retail sales of £121 million, after a £188 million inflow in January. Government Bond funds were the top selling fixed income category in February with net inflows of £185 million.
UK equity funds saw £1.4 billion withdrawn, easing slightly from £1.7 billion in January.
Under the bonnet of equities
Looking under the bonnet of the equity asset class, our figures show inflows of £1.4 billion into equity trackers in February, primarily to North American and Global funds as investors seek low-cost products to access the equity market. This is in spite of US market performance faltering through the first quarter of 2025 – the S&P 500 fell 4.6% in Q1, the worst result since 2022. Actively managed equity funds saw an outflow of just under £3 billion.
By region, North American equities remained the most popular with investors with a net inflow of £496 million, up from £356 million in January. Global equities followed behind with an inflow of £238 million. The high valuations of the Magnificent 7 stocks, which have seen some of the biggest falls in Q1, and the impact of tariffs on US company valuations may mean that investors shift away from making additional allocations to the US over the next quarter.
The threat of tariffs and macroeconomic volatility has however started to impact the Asian equity markets. The Asia Pacific Excluding Japan sector has seen outflows of £348 million since the start of the year. The India sector experienced an outflow of £188 million in February, its worst month since the sector’s 2021 launch. The Indian market valuation has fallen since a September 2024 peak as profit growth for the largest Indian companies has slowed and India has underperformed other Asian markets in 2025
Miranda Seath, Director, Market Insight & Fund Sectors at the Investment Association, said:
“It’s clear the start of 2025 is a very different landscape for investors from the end of 2024 when markets rose on the back of the US election victory. The spectre of rising inflation is back. The shift from rhetoric to reality on Trump’s tariffs is set to drive inflation. In the UK, household bills are set to increase substantially in April as the energy price cap ends, water bills rise by double digit percentages and council tax increases. Businesses will also look to cover the cost of the April National Insurance Contribution rise.
“Central banks, government and investors will keep a close watch on whether any increase in inflation will be transitory or more persistent. Either way, it is likely to affect interest rates and Central Bank policy in the near term. Rate cuts look set to pause and this will affect equity market performance, while bonds are in a good position if investors pivot to risk off.
“The bigger issue is that uncertainty may lead investors sit on their hands or redeploy capital away from investments to cash savings, which risks poorer financial outcomes over the long-term. Our recent ISA research shows many cash savers, as well as investors, are saving for their retirement, and it is important that they do not miss out on the benefits of long-term investment due to concerns over short-term volatility.”
APPENDIX
FUNDS UNDER MANAGEMENT AND NET SALES – February 2025
| Funds Under Management | Net Retail Sales | Net Institutional Sales |
February 2025 | £1.53 billion | -£562 million | -£1.5 billion |
February 2024 | £1.44 billion | -£2.4 billion | -£2.1 billion |
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for February 2025 were:
Global with net retail sales of £552 million.
North America followed with net retail sales of £415 million.
Volatility Managed with net retail sales of £349 million.
Short Term Money Market with net retail sales of £304 million.
Mixed Investment 40-85% was fifth with net retail sales of £273 million.
The worst-selling Investment Association sector in February 2025 was UK All Companies which experienced outflows of £893 million.
NET RETAIL SALES BY ASSET CLASS
Money Market saw £478 million in inflows.
Mixed Asset saw £409 million in inflows.
Fixed Income saw £121 million in inflows.
Other saw £97 million in inflows.
Property saw £75 million in outflows.
Equities saw £1.6 billion in outflows.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
North America saw net retail inflows of £496 million.
Global funds experienced inflows of £238 million.
Japan funds experienced outflows of £55 million
Europe funds saw net retail outflows of £365 million.
Asia funds experienced outflows of £374 million.
UK funds saw net retail outflows of £1.4 billion.
TRACKER FUNDS
Tracker funds saw net retail inflows of £1.8 million in February 2025. Tracker funds under management stood at £381.7 billion at the end of February. Their overall share of industry funds under management was 25%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail outflow of £573 million in February 2025. Responsible investment funds under management stood at £102.3 billion at the end of February. Their overall share of industry funds under management was 6.7%.
For further information, please contact:
Helen Ayres, Head of Communications: helen.ayres@theia.org
T: +44 (0)20 7269 4620
Ellen Hodgetts, Communications Manager: ellen.hodgetts@theia.org
T: +44 7548841289
IA Press Office: press@theia.org
Notes to Editors
To see a breakdown of the fund data referenced in this press release, please see all of the tables here.
The Investment Association's figures for fund sales cover retail and institutional sales in authorised unit trusts and open-ended investment companies (OEICs) provided by our membership to UK investors. The figures do not include investment trusts and ETFs.
Each month small revisions to figures have been made since the previous press release. This reflects additional information received by The Investment Association.
Net retail sales comprise total retail sales minus repurchases (including switches between funds), thus the figures can result in a negative figure or outflow.
* Regional breakdown for equity funds
The following Investment Association sectors have been grouped together to compile the figures for regional equity sales:
Asia | Europe | Global | Japan | North America | UK |
Asia Pacific excl. Japan | Europe excl. UK | Global | Japan | North America | UK All Companies |
Asia Pacific incl. Japan | Europe incl. UK | Global Emerging Markets | Japanese Smaller Companies | North America Smaller Companies | UK Equity Income |
China/Greater China | Europe Smaller Companies | Global Equity Income |
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India/Indian Subcontinent |
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| Technology and Technology innovation |
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| Financials and Financial innovation |
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Direct Channels
Direct includes sales forces and tied agents, private clients and other direct to investor sales without intermediation.
** The Investment Association’s ISA figures are based on information collected from fund companies and five fund platforms (AEGON, Fidelity, Hargreaves Lansdown, Quilter, and Transact) where they are the ISA provider. Fund business through other ISA providers such as wealth managers is not included. The Investment Association’s figures cover about three-quarters of the whole of the market for funds held in ISAs.
About the Investment Association (IA):
- The IA champions UK investment management, supporting British savers, investors and businesses. Our 250 members manage £9.1 trillion of assets and the investment management industry supports 126,400 jobs across the UK.
- Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
- Our purpose is to ensure investment managers are in the best possible position to:
- Build people’s resilience to financial adversity
- Help people achieve their financial aspirations
- Enable people to maintain a decent standard of living as they grow older
- Contribute to economic growth through the efficient allocation of capital.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
- The UK is the second largest investment management centre in the world, after the US and manages 37% of all assets managed in Europe.