Bond funds attracted £1.06 billion of net inflows in June, making it the third-strongest month for fixed income funds on record, according to the latest Fund Flow Index from Calastone, the largest global funds network.
Investors continued to rebalance portfolios towards assets offering income and diversification and away from highly valued stock markets.
Strong demand for fixed income funds came as equity funds suffered net outflows of £437 million during the month despite equity markets themselves holding firm.
All equity fund sectors saw outflows in June, except global and North American funds, which gained £328 million and £200 million respectively. The weakest sector was Asia-Pacific, where investors sold £312 million of their holdings.
June marked the 38th consecutive month of outflows for Asia-Pacific equity funds, the longest run of outflows for any fund sector — and now totaling £7.05 billion since May 2023).
Unloved UK-focused funds suffered £260 million of outflows, more than reversing May’s “rare inflow.”
Meanwhile, multi-asset funds extended their strong run with £1.97 billion of inflows. Money market funds returned to positive territory, attracting £215 million of new cash.
“The first half of 2026 tells the same story even more clearly,” said Calastone.
“Bond funds have attracted £2.25bn of net new money so far this year, while equity funds have seen net outflows of £2.67bn.
“The standout performer has been the multi-asset sector, which has attracted a record-breaking £11.9bn during the first six months of the year, comfortably the strongest six-month period on Calastone’s record.”
Edward Glyn, Head of Global Markets at Calastone, said: “Investors are still willing to take risk, but they’re becoming much more selective about how they do it. Rather than adding more money to equity markets after their strong run, many are building more balanced portfolios that combine growth potential with greater resilience.
“Bond funds are benefiting from an unusually attractive combination of high income and the prospect of capital gains if interest rates begin to fall. At the same time, geopolitical tensions, an uncertain economic outlook and elevated equity valuations are encouraging investors to rebuild the defensive side of their portfolios.
“The exceptional demand for multi-asset funds reflects the same theme. Investors increasingly want diversified portfolios at present without having to make big calls on whether stocks or bonds will outperform next. Multi-asset funds allow professional managers to adjust those allocations as market conditions evolve, making them an appealing choice at a time when the outlook remains unusually uncertain.
“Cash funds continue to attract some inflows, but the much stronger demand for bonds and multi-asset strategies suggests investors are moving beyond simply preserving capital. They are looking for portfolios that can generate returns while remaining resilient if markets become more volatile.”