Fund flows stayed positive for the tenth month in a row in August

Overall flows remained healthy, but UK investors continued to sell equities - especially domestic shares.

UK retail investors continued to put more money into funds than they withdrew in August, extending the run to ten straight months. A few sectors, however, recorded net outflows.

The Investment Association (IA), which represents the UK's fund managers, reported that UK-based investment funds recorded 894 million in net retail sales in August. That compares with 1.8 billion in net outflows during the same month last year.

"Although the summer break usually slows flows and the outlook for price inflation had worsened, investors stayed calm and continued investing through the warmer months," said Miranda Seath, director of market insight and fund sectors at the IA.

August's positive figure brings net retail fund flows for the first eight months of 2026 to 13.8 billion.

Monthly net retail fund flows have stayed positive since October 2025, when investors withdrew 4.6 billion.

Which asset classes were the most popular in August?

Investors bought more funds than they sold overall in August, but the results varied sharply across asset classes.

Investors favored fixed-income and mixed-asset funds, which attracted inflows of 656 million and 749 million, respectively.

Equity funds still lost 478 million during the month. That may sound negative for stocks, but the withdrawal was far smaller than July's, when nearly 2 billion left equity funds.

Swipe horizontally to scroll Source: The Investment Association

After three straight months of inflows, money market funds recorded net outflows of 728 million in August.

Which equity fund sectors saw the biggest outflows during August?

Equity funds recorded net outflows across every sector in August. Global funds were the only exception, attracting net inflows of 568 million; no other individual sector posted a significant positive flow that month.

August still saw 459 million leave equity funds, but that was a clear improvement after three straight months of outflows above 1.4 billion. June recorded the worst result, with 1.86 billion withdrawn.

UK equity funds suffered the heaviest losses in August: 615 million flowed out. July had been far worse, however, with withdrawals from the sector reaching 1.65 billion.

North American funds went from receiving 201 million in July to losing 363 million in August. Asian funds also saw heavier withdrawals, rising from 49 million to 114 million over the same period.

Funds focused on European equities took in 40 million, while Japanese-stock funds received 25 million.

Should you invest in funds?

Funds let investors spread money across nearly any asset class, making them useful in many kinds of markets. August's data shows that clearly through the money flowing into some sectors and out of others.

The IA observed that uncertainty naturally enters people's decisions when they consider buying funds.

"Investor behaviour is not shaped by market conditions alone," said the IAs Seath. "Domestic policy matters just as much. With the Autumn Budget approaching, stability remains central to investor confidence."

She added that UK retail investors pulled 4.5 billion from investments in October 2025 - the final full month before the previous Budget - including 1.4 billion from UK equities as reported tax changes caused concern.

New investors should remember that funds differ widely, and some are easier starting points than others. Research each option, then weigh it against your goals and comfort with risk before investing.