UK retail investors pulled out £1.4bn from funds in September, according to the latest data from the Investment Association.

The month saw the largest outflows so far this year.

Gross retail sales for UK intermediaries including IFAs totalled £8.8bn, representing a market share of 36.2%. This was a slight fall in the total (August: £8.9bn) but an increase in the market share (AugustL 31.5%).

Despite the outflows in September, the third quarter saw £1.2bn in net inflows. This compares to £3.9bn in net inflows in Q1 and £2.2bn in net inflows in Q2.

Equity funds turned to outflows of £1.6bn, following moderate inflows in August.

Mixed asset funds saw moderate inflows, increasing to £781m from August’s inflow of £478m.

Outflows from fixed income slowed to £79m, from £298m in August.

Responsible investments saw its highest outflow on record with outflows of £544m.

The UK All Companies was the worst-selling sector, with £884m in outflows.

UK Gilts were the best-selling sector with inflows of £237m.

Chris Cummings, chief executive of the Investment Association, said:  “Investors continue to be squeezed by inflationary pressures and the cost of living, as net inflows into funds experience their second quarter of decline. Despite £1.2 billion invested in funds between July 1 and September 30, this is down on the first quarter of the year, which saw almost £4 billion invested.

“UK Gilts continues to be a favourite throughout the uncertainty and was the best-selling sector in September, and an increased inflow into Mixed Asset funds was a bright spot in a challenging month.”

The month ended with £1.38trn of funds under management. This was a slight fall from the total funds under management in August (£1.39trn).

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.