July Sees Largest Equity Selloff since October 2025
Asset class
- Net flows for July 2026 were £1.14bn (excluding MMFs, -£5.00bn)
- Equities suffered £8.29bn of redemptions, while money market funds (+£6.14bn) and bonds (+£3.99bn) absorbed significant assets
Active v passive
- Monthly flows split £1.48bn to active funds versus £340m of passive redemptions
- YTD, passive strategies have attracted £20.78bn, while active funds are in net redemption (-£2.26bn)
Classifications
- Money Market GBP attracted the largest July inflow (+£5.85bn), almost entirely active
- Mixed Asset GBP Balanced – Global suffered the heaviest redemptions (-£3.35bn), followed by Equity Global (-£3.14bn)
Asset manager
- Legal & General led July sales (+£3.18bn), driven mainly by money market funds (+£2.16bn)
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to July 2026 (£bn)
Source: LSEG Lipper
July’s headline net inflow of £1.14bn masks a much weaker underlying picture. Excluding money market funds, UK fund flows were
-£5.00bn, as a sharp equity selloff went alongside a strong demand for bonds.
Equity investors remain transfixed by all things AI. However, that covers a lot of bases. July saw the “love hardware, hate software” trade reverse, as beaten-up software stocks recovered a little lost ground, while hardware-dominated markets such as the Korean Kospi continued the decline begun in June. Meanwhile, energy stocks rebounded as the Gordion Knot of the Strait of Hormuz seemed to become ever more intractable.
Equity funds suffered £8.29bn of redemptions in July, the largest monthly outflow since October 2025 (-£12.82bn). This represents a marked deterioration from June’s £2.69bn outflow and continues a difficult year for the asset class: equities have now seen redemptions in five of the first seven months of 2026. The longer-term chart also puts July’s move into perspective: while still well below the exceptional £34.47bn withdrawn in July 2025, it is one of the more severe equity selloffs of the past 12 months.
Bonds provided the main counterweight, attracting £3.99bn in July. This extends the positive run seen since April and follows inflows of £5.68bn in May and £3.82bn in June. Money market funds were stronger still, taking £6.14bn, and were the principal reason total industry flows remained positive during the month.
Elsewhere, mixed-assets funds reversed recent strength to suffer £886m of redemptions, following inflows of £2.75bn in June. Alternatives remained positive (+£219m), while commodity funds attracted £34m. Real estate (-£14m) and ‘other’ funds (-£52m) saw modest redemptions.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, July 2026 (£bn)
Source: LSEG Lipper
Net flows for July were £1.14bn (active, +£1.48bn/passive, -£340m). Excluding money market funds, however, the picture was considerably weaker—not least for active strategies—with redemptions of £5.00bn (active, -£4.41bn/passive, -£590m).
Money market funds dominated the positive side of the ledger, attracting £6.14bn, overwhelmingly to active strategies (+£5.89bn). Bonds also had a strong month, taking £3.99bn, with passive funds accounting for more than three-quarters of the total (active, +£870m/passive, +£3.12bn). Alternatives attracted £219m, almost entirely through active strategies (+£214m) as the asset class continues to see steady if not stellar flows, with investors seeking strategies with downside protection. Meanwhile, commodity funds also added £34m.
That was more than offset outside MMFs by heavy equity redemptions. Equity funds shed £8.29bn in July, with significant outflows from both active and passive vehicles (active, -£4.67bn/passive, -£3.62bn). This represents a notable monthly departure from the previous monthly and YTD patterns, where passive equity funds remain firmly in positive territory.
Mixed-assets funds also suffered redemptions of £886m, largely active (-£825m). Real estate (-£14m) and ‘other’ funds (-£52m) were modestly negative.
Chart 3: Asset Class Flows, Active and Passive, YTD 2026 (£bn)
Source: LSEG Lipper
YTD flows to the end of July were £18.51bn (active, -£2.26bn/passive, +£20.78bn). Excluding MMFs, net sales were £13.65bn (active, -£6.20bn/passive, +£19.85bn), underlining the extent to which passive strategies have carried flows this year.
Bonds are the strongest-selling asset class YTD, attracting £16.72bn. Both management styles have benefited, although demand is weighted towards passive funds (active, +£5.23bn/passive, +£11.49bn). Mixed-assets funds follow with £11.12bn, in sharp contrast being overwhelmingly active (active, +£10.51bn/passive, +£612m).
Alternatives have also been a significant support for active flows, attracting £4.95bn, virtually all active. Money market funds have taken £4.87bn (active, +£3.94bn/passive, +£930m).
Equities remain by far the largest drag on the YTD total, with redemptions of £19.03bn. The underlying active-to-passive divide remains pronounced: active equity funds have shed £26.42bn, while passive products have attracted £7.38bn. July therefore weakened both channels, but has not overturned the substantial YTD rotation towards passive equity exposure.
Real estate remains negative YTD (-£526m), entirely through active funds. Commodities have attracted £350m, mainly passive, while ‘other’ funds are modestly positive at £65m.
ETFs and Passive Mutual Funds
Chart 4: Passive Asset Class Flows, Mutual Funds v ETFs, July 2026 (£bn)
Source: LSEG Lipper
Passive funds suffered £340m of net redemptions in July, but the vehicle split was sharply divergent (mutual funds, -£1.35bn/ETFs, +£1.01bn).
Equity was the principal drag, which suffered an unusually poor month. Passive equity funds shed £3.62bn, overwhelmingly through mutual funds (mutual funds, -£3.39bn/ETFs, -£226m). This was only partly offset by strong passive bond demand of £3.12bn, with both vehicle types attracting assets (mutual funds, +£1.93bn/ETFs, +£1.19bn).
As a result, ETFs remained in positive territory for the month despite equity ETF redemptions, supported primarily by bonds. Passive mutual funds, by contrast, were pulled negative by the scale of equity outflows.
Money market funds added £250m (mutual funds, +£162m/ETFs, +£88m), while commodity funds also attracted £16m. Mixed-assets passive funds shed £61m, all from mutual funds, and ‘other’ funds saw £52m of ETF redemptions. Alternatives were effectively flat, with £6m of ETF inflows offsetting £1m of mutual fund redemptions.
Chart 5: Passive Asset Class Flows, Mutual Funds v ETFs, YTD 2026 (£bn)
Source: LSEG Lipper
Passive funds have attracted £20.78bn YTD, with mutual funds accounting for almost three-quarters of the total (mutual funds, +£15.07bn/ETFs, +£5.71bn).
Bonds dominate passive demand, taking £11.49bn, split between mutual funds (+£7.20bn) and ETFs (+£4.29bn). Equities remain the second-largest source of passive inflows YTD at £7.38bn despite July’s significant redemptions. Again, mutual funds account for most of the total (+£6.84bn), while ETFs have added £544m. This is a very different picture to the European market, where ETFs take the overwhelming bulk of flows, not just in the passive market but overall.
Money market funds have attracted £930m through passive vehicles, with ETFs (+£563m) ahead of mutual funds (+£367m). Mixed-assets passive flows stand at £612m, entirely through mutual funds.
Commodity funds have taken £295m, mainly through ETFs (+£232m), while ‘other’ funds have attracted £65m, all via ETFs. Alternatives are effectively flat YTD (-£1m), with small mutual fund redemptions (-£11m) offset by ETF inflows (+£10m).
Flows by Classification
Chart 6: Largest Positive and Negative Flows by LSEG Lipper Global Classification, July 2026 (£bn)
Source: LSEG Lipper
Unsurprisingly, in such a risk-on month, Money Market GBP attracted by far the largest inflow in July (+£5.85bn), virtually all of it active strategies (+£5.84bn). This sits with the strong money market demand evident at asset-class level and was the principal factor keeping overall July industry flows positive.
As aggregate asset class flows would suggest, developed market investment grade bond classifications were broadly well supported. As government bonds generally weakened as yields rose over the month, Bond Global GBP attracted £1.32bn (active, +£460m/passive, +£862m), followed by Bond Global USD (+£773m), Bond GBP Government (+£584m), Bond Global Corporates GBP (+£413m), and Bond Global Corporates USD (+£372m). Bond GBP Government showed the clearest rotation within this group, with small active redemptions (-£40m) more than offset by passive inflows (+£624m).
Equity flows were much more polarised, in a month where energy rallied off the back of further Strait of Hormuz instability. This was good for value funds, and so also for the UK market, which outperformed—though, as is so often the case, this wasn’t reflected in flows to the UK classifications. Equity UK (-£977m), Equity UK Income (-£455m), and Equity UK Sm&Mid Cap (-£442m) suffered redemptions.
Equity US, however, attracted £1.91bn, almost evenly divided between active (+£933m) and passive (+£979m) strategies. Equity Emerging Markets Global also took £668m, but this masked a strong active-to-passive switch (active, -£453m/passive, +£1.12bn).
In general, the equity picture was heavily negative. In line with the previous month, Equity Global suffered the largest equity redemptions (-£3.14bn), with both active (-£2.24bn) and passive (-£895m) funds losing assets. Equity Europe ex UK shed £2.01bn, driven mainly by passive outflows (-£1.70bn), while Equity Japan lost £1.50bn, again overwhelmingly passive (-£1.41bn). Equity Global Sm&Mid Cap (-£777m), Equity Sector Real Estate Global (-£537m) were also negative.
Mixed-assets classifications were similarly divided. Mixed Asset GBP Conservative – Global attracted £1.99bn, almost all active (+£1.98bn), while Mixed Asset GBP Flexible took £386m. At the other end of the table, Mixed Asset GBP Balanced – Global suffered the largest redemptions of any classification (-£3.35bn), all from active funds (-£3.36bn).
Chart 7: Largest Positive and Negative Flows by LSEG Lipper Global Classification, YTD 2026 (£bn)
Source: LSEG Lipper
Bond Global USD is the largest-selling classification YTD, attracting £8.44bn, overwhelmingly through active funds (+£7.88bn). Bond Global GBP has also been strongly positive (+£2.70bn), while Bond Global Corporates USD has attracted £782m.
Equity Global ex UK ranks second overall, with inflows of £6.93bn. These are almost entirely active (+£7.00bn), despite July’s £435m of redemptions. That contrasts sharply with Equity Global, which has suffered the largest YTD outflows (-£3.98bn: active, -£3.09bn/passive, -£895m).
The broader equity picture is weak. Equity Europe ex UK has shed £2.51bn, Equity Asia Pacific ex Japan £1.79bn, Equity UK Sm&Mid Cap £1.18bn, Equity Japan £1.15bn, and Equity UK £1.08bn. Equity Emerging Markets Global is also negative YTD (-£708m), although passive inflows (+£1.12bn) have partially offset substantial active redemptions (-£1.83bn).
Mixed assets remain an important source of active demand. Mixed Asset GBP Aggressive – Global has attracted £4.77bn, almost entirely active (+£4.76bn), while Mixed Asset GBP Flexible has taken £2.07bn and Mixed Asset GBP Conservative – Global £1.26bn. However, July’s very large redemption from Mixed Asset GBP Balanced – Global has pushed that classification into negative territory YTD (-£768m).
Alternatives also feature among the leading classifications, with Alternative Multi Strategies attracting £979m and Alternative Credit Focus £954m, both almost entirely active.
Despite July’s very strong inflow, Money Market GBP remains negative YTD (-£2.38bn), indicating the extent of redemptions suffered earlier in the year.
Flows: Institutional v Retail
Chart 8: Asset Class Flows, Institutional and Retail, July 2026 (£bn)
Source: LSEG Lipper
July’s £1.14bn net inflow was (in aggregate at least) entirely attributable to institutional investors, who added £1.17bn, while retail flows were marginally negative (-£31m). Excluding MMFs, both investor groups were in redemption (retail, -£1.64bn/institutional, -£3.36bn).
Money market funds accounted for much of the institutional result. Institutional investors allocated £4.53bn to the asset class, compared with £1.60bn from retail investors. Bonds also attracted significant assets from both groups, although retail demand was stronger (retail, +£2.64bn/institutional, +£1.35bn).
Equity redemptions were substantial across both investor types, unlike in June, where institutions were buying. In July, retail investors withdrew £4.45bn, while institutional investors redeemed £3.84bn. Mixed-assets funds were also negative across both channels (retail, -£276m/institutional, -£610m).
Alternatives showed the clearest divergence. Retail investors allocated £505m, while institutional investors withdrew £286m, leaving the asset class with a net £219m inflow. The remaining categories saw relatively modest flows.
Chart 9: Asset Class Flows, Institutional v Retail, YTD 2026 (£bn)
Source: LSEG Lipper
YTD net flows stand at £18.51bn, with institutional investors accounting for the majority (retail, +£4.18bn/institutional, +£14.34bn). Excluding MMFs, flows remain strongly positive at £13.65bn (retail, +£3.69bn/institutional, +£9.95bn).
Bonds have attracted the largest allocations from both groups, but retail investors have contributed the greater share: £10.76bn compared with £5.96bn from institutions. The pattern is similar for mixed-assets funds, where retail flows of £7.87bn are well ahead of institutional allocations of £3.25bn.
Institutional investors have been more important to alternatives and (unsurprisingly) money market funds. Alternatives have attracted £3.05bn institutionally and £1.90bn from retail investors, while the £4.87bn YTD money market total is overwhelmingly institutional (retail, +£484m/institutional, +£4.38bn).
Equities present the clearest contrast. Of the £19.03bn of YTD equity redemptions, £16.99bn has come from retail investors, compared with £2.04bn institutionally. Despite these very large equity outflows, retail flows remain positive overall because allocations to bonds and mixed assets have more than compensated.
Flows by Promoter
Chart 10: Largest Positive Flows by Promoter, July 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted £11.61bn in July. That compares with just £1.14bn of net industry inflows, meaning the leading promoters took more than 10 times the overall net total as their gains were offset by significant redemptions elsewhere.
Legal & General led by a clear margin (+£3.18bn), with money market funds accounting for £2.16bn of the total. Mixed assets (+£591m), equities (+£260m), and bonds (+£153m) also contributed.
HSBC ranked second (+£1.77bn), again with money market funds the principal driver (+£1.75bn), alongside bond inflows (+£530m). These were partly offset by sizeable equity redemptions (-£663m).
Vanguard attracted £1.42bn, led by equity funds (+£940m), with bonds (+£289m) and mixed assets (+£140m) also positive. Schroders followed (+£1.35bn), driven principally by equities, where the firm was the biggest money taker (+£1.04bn) and mixed assets (+£311m), despite modest money market redemptions (-£62m).
Aviva attracted £1.06bn, with money market inflows of £1.51bn more than compensating for equity (-£507m) and mixed-assets (-£65m) redemptions. Royal London (+£780m), Invesco (+£727m), Goldman Sachs (+£561m), Dimensional (+£412m), and Northern Trust (+£354m) completed the top 10.
Chart 11: Largest Positive Flows by Promoter, YTD 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters have attracted £46.77bn YTD, equivalent to around two-and-a-half times total industry net flows of £18.51bn. As with July’s monthly figures, this indicates considerable concentration of positive flows among the leading firms, offset by redemptions elsewhere.
Vanguard leads by a clear margin (+£12.68bn), with equity funds accounting for £8.59bn. Bonds (+£2.68bn), mixed assets (+£992m), and money market funds (+£419m) have also contributed.
HSBC ranks second (+£10.34bn), with bond inflows of £5.15bn the largest component, supplemented by money market funds (+£2.99bn), mixed assets (+£1.07bn), equities (+£898m), and alternatives (+£237m).
Legal & General is third (+£5.48bn), driven mainly by money market funds (+£3.54bn) and mixed assets (+£2.04bn), partly offset by equity redemptions (-£389m).
Schroders has attracted £4.18bn YTD, but this remains heavily concentrated in mixed assets (+£5.50bn). That has more than offset redemptions from bonds (-£1.19bn), money market funds (-£633m), and alternatives (-£151m).
Amundi follows (+£3.72bn), with equities (+£1.88bn), bonds (+£977m), and money market funds (+£886m) the main contributors. JPMorgan has attracted £2.59bn, driven by money market funds (+£3.08bn) despite sizeable equity redemptions (-£1.29bn). Northern Trust (+£2.03bn), Invesco (+£1.98bn), Titan Wealth (+£1.94bn), and Coutts (+£1.84bn) complete the top 10, with Coutts’ result dominated by mixed-assets inflows (+£1.75bn).
