Fund outflows fell to £562m in February from £3bn in January, according to the latest data from the Investment Association, the fund managers' trade body.

Equity funds continued to dominate outflows, with UK retail investors taking £1.6bn out of funds in February.

UK equity funds were hit particularly hard with £1.4bn in outflows, slightly lower than the £1.7bn of outflows seen in January.

North American equities remained the most popular with investors with a net inflow of £496m, up from £356m in January.

The figures were collated before most of the new import tariffs were introduced by US President Donald Trump. Experts say it is too early to predict the impact of the tariffs on fund movements.

Regional equity fund flows February 2024-February 2025

Source: Investment Association, 3 April 2025

Mixed asset funds continued to be popular with £409m of inflows, the highest since January 2023 (£493m) as investors looked to diversify their investments due to political and economic uncertainty.

The IA Global sector was the highest selling sector with net retail sales of £552m.

Fixed income funds continued to see modest inflows with net retail sales of £121m in February, a slight fall from the £188m inflows reported for January. Government Bond funds were the top selling fixed income category in February with net inflows of £185m.

Miranda Seath, director of market insight and fund sectors at the Investment Association, said we are now seeing a very different landscape for investors emerging.

She said: “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.” 

The five best-selling Investment Association sectors for February 2025 were: 

1. Global with net retail sales of £552m.
2. North America followed with net retail sales of £415m.
3. Volatility Managed with net retail sales of £349m.
4. Short Term Money Market with net retail sales of £304m.
5. Mixed Investment 40-85% was fifth with net retail sales of £273m.

The worst-selling Investment Association sector in February 2025 was UK All Companies which experienced outflows of £893m.