Fund outflows from UK equities reached £964 million in June, according to the latest data published by the UK’s Investment Association (IA).

These were the worst recorded outflows in three months and an acceleration away from the relatively soft outflows of £356 million in May.

The IA said that overall, UK retail investors in June added a modest £438 million to funds — including North American and European — bringing total inflows for the first half of 2025 to £2.9 billion.

The IA champions the UK investment management. Its 250 members manage £9.1 trillion of assets.

“The first six months of 2025 has been a game of two halves with a tough Q1 (-£1.9 bn) giving way to a much more positive Q2 with inflows of £4.8 billion,” said the IA.

“A turbulent geopolitical backdrop polarised investor behaviour, with some taking advantage of market volatility through April and ‘buying the dip’, boosting sales to North American equities. Others preferred caution and portfolio diversification, opting for European equities or funds that are managed to volatility targets.

“Growing interest in European assets reflects capital shifting away from the US, and the strong performance of Mixed Asset funds – with £2.6 billion inflows recorded in H1 – highlights the attraction for some investors of leaving allocation decisions to professional investment managers in times of uncertainty.

“H1 inflows of £2.9 billion compares to £1.7 billion over the same period in 2024. Despite significant global market events, the monthly data suggests that investors have remained resilient – gradually re-entering markets and adjusting their portfolio to suit risk appetite.”

Miranda Seath, Director, Market Insight & Fund Sectors at the Investment Association, said: “After a rocky start to 2025, we’re starting to see the mood shifting amongst investors. Despite Q1 2025 recording outflows of £1.9bn, June continued the trend of monthly inflows and markets have remained resilient in the face of trade wars and uncertain tariff policy.

“We have seen some risk-on investors ‘’buying the dip’ in the wake of Liberation Day. Others have taken risk off the table, opting for government bonds or diversifying away from the US and global emerging markets, economies that are more exposed to shifting global trade alliances.

“In times of market volatility, investors should carefully consider the right risk reward trade off and long-term goals should stay front of mind.

“Elsewhere, sustained inflows into mixed assets funds uncover an interesting trend as investors come back to ‘investment solutions’ – we had seen persistent outflows from the mixed asset class between 2022 and 2024. In the face of heightened uncertainty, investors are now opting for strategies where investment managers calibrate allocations to equities and bonds on their behalf.

“Closer to home, UK equity funds remained in net outflow in June. However, recent government efforts to re-energise domestic capital markets through the Leeds Reforms and Spending Review could signal a change on the horizon with efforts to create more of a culture of retail investment in the UK.

“IA research suggests that a level of home bias continues to exist amongst end investors and attracting more people to investing could be a boost to UK equities in the long-term.

“However, as June data suggests, the current crop of investors is keeping a close eye on the UK economy – the Chancellor’s plans for this year’s Autumn Budget will be significant and investors will wait to see the impact of potential tax rises and if the economic outlook will improve.”