September Sees the Largest Redemptions of 2026,
as Equity Funds Sell Off Further
Asset class
- September saw net redemptions of £16.99bn, the second-largest monthly outflow in three years
- Equities suffered their heaviest redemptions since October 2025 (-£10.35bn), while bonds saw their sixth consecutive month of inflows (+£1.46bn)
Active v passive
- Active funds shed £14.62bn in September, while passive funds also suffered substantial redemptions (-£2.37bn)
- YTD, active funds have lost £54.31bn, partly offset by passive inflows (+£21.88bn), led by bonds
Classifications
- Equity Global suffered September’s largest redemptions (-£5.09bn), as Mixed Asset GBP Aggressive – Global attracted the largest inflows (+£1.20bn)
- Bond Global USD leads YTD inflows (+£7.23bn), followed by Equity Global ex UK (+£5.80bn)
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to September 2026 (£bn)
Source: LSEG Lipper
September saw net redemptions of £16.99bn, the second-largest monthly outflow over the 36 months covered by the chart, behind July 2025 (-£27.04bn). Unlike July 2025, when equity redemptions dominated, September’s outflows were spread across several asset classes, albeit with equities seeing the largest outflows for the month.
Indeed, equities suffered their heaviest redemptions since October 2025 (-£12.82bn), shedding £10.35bn. This follows a volatile year for the asset class, with July 2026’s £8.29bn outflow giving way to more modest redemptions in August (-£2.04bn), before September’s renewed deterioration. That said, the asset class hasn’t had a positive month since April (a modest +£265m) and has shed about £34bn YTD. The weakness contrasts with relatively resilient global equity markets over Q3.
Bonds attracted £1.46bn, their sixth consecutive month of positive flows. This represents a modest recovery from August (+£1.14bn), although demand remains well below May’s £5.69bn peak and the substantial inflows recorded in June and July. The persistence of positive flows is notable given the pressure on sovereign bonds from rising yields over Q3.
Real estate flows also reversed sharply, from August’s unusually large £2.09bn inflow to September’s £2.68bn outflow. This volatility stands in contrast to the relatively consistent, albeit smaller, redemptions that characterised much of the preceding three years. However, these swings are down to internal moves by the asset managers in question. Excluding these, the asset class continues its incessant, if incremental, decline.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, September 2026 (£bn)
Source: LSEG Lipper
Overall, September saw a broad retreat from both active and passive funds, with bonds the principal exception. Net redemptions for the month were £16.99bn, with active funds accounting for the bulk of redemptions (-£14.62bn), although passive funds also saw substantial outflows (-£2.37bn). Excluding money market funds (MMFs), net redemptions were £13.73bn (active, -£11.33bn/passive, -£2.40bn).
Bonds were the month’s strongest selling asset class (+£1.46bn), with active funds attracting £920m and passive funds £540m. This is particularly notable given the pressure on fixed income markets from rising sovereign yields. Commodities also remained positive (+£101m), mainly through passive vehicles (+£68m).
Equities suffered the heaviest redemptions (-£10.35bn), with both active (-£7.27bn) and passive (-£3.07bn) funds losing assets. While active equity redemptions have been a persistent feature of UK fund flows, the substantial passive outflows mark a departure from the strong active-to-passive rotation seen over much of 2026 (see chart 3, below).
MMFs also suffered significant redemptions (-£3.26bn), almost entirely from active funds (-£3.30bn). Real estate saw outflows of £2.68bn, all active, reversing August’s unusually large inflows. Alternatives also reversed their recent positive trend, shedding £1.66bn, again almost entirely active.
Mixed-assets funds saw redemptions of £615m, with active outflows (-£675m) partly offset by modest passive inflows (+£60m).
Chart 3: Asset Class Flows, Active and Passive, YTD 2026 (£bn)
Source: LSEG Lipper
YTD flows to September were (-£32.42bn), with substantial active redemptions (-£54.31bn) partly offset by passive inflows (+£21.88bn). Excluding MMFs, net redemptions were £29.34bn (active, -£50.14bn/passive, +£20.81bn).
Equities remain the largest drag on flows, shedding £33.94bn YTD. This masks an active-to-passive rotation, with active equity funds suffering redemptions of £39.50bn, while passive vehicles attracted £5.56bn. However, September’s substantial passive equity outflows suggest that even tracker funds are not immune to the broader weakness in investor demand.
Real estate has also suffered exceptionally large redemptions (-£27.74bn), entirely from active funds, although as outlined under chart 1, this is largely down to moves within one asset manager.
Bonds continue to be the strongest selling asset class (+£21.40bn), with passive funds accounting for almost two-thirds of inflows (+£13.95bn), although active strategies have also attracted substantial assets (+£7.45bn). This resilience is notable given the pressure on sovereign bond markets from rising yields.
Mixed-assets funds rank second (+£7.53bn), overwhelmingly active (+£6.75bn), continuing to provide important support for active fund sales. Alternatives have attracted £2.84bn, also almost entirely active, despite September’s sharp reversal.
Overall, passive demand remains positive YTD but has been insufficient to offset persistent active redemptions.
ETFs and Passive Mutual Funds
Chart 4: Passive Asset Class Flows, Mutual Funds v ETFs, September 2026 (£bn)
Source: LSEG Lipper
In September, ETFs remained firmly in positive territory despite substantial withdrawals from passive mutual funds. Passive funds suffered redemptions of £2.37bn in September, as ETFs attracted £1.20bn.
Equities dominated passive redemptions (-£3.07bn), driven entirely by mutual funds (-£3.40bn), while equity ETFs continued to attract assets, albeit at a more subdued level (+£326m). This marks a significant reversal for passive equity mutual funds, which have been the main beneficiaries of the active-to-passive rotation over much of 2026.
Bonds were the strongest-selling passive asset class (+£540m), with ETF inflows (+£708m) more than offsetting mutual fund redemptions (-£168m). This suggests a clear preference for the ETF vehicle within passive fixed income allocations.
Money market ETFs also attracted £97m, against mutual fund redemptions of £62m. Passive mixed-assets funds took £60m, all through mutual funds, while commodity ETFs attracted £68m.
Chart 5: Passive Asset Class Flows, Mutual Funds v ETFs, YTD 2026 (£bn)
Source: LSEG Lipper
Passive funds have attracted £21.88bn YTD, with mutual funds accounting for almost two-thirds (+£14.15bn), while ETFs have taken £7.73bn.
As is the case overall, bonds dominate passive demand (+£13.95bn), with mutual funds attracting £8.29bn and ETFs £5.66bn. This makes fixed income the largest contributor to both vehicles’ positive YTD flows despite the challenging bond market environment.
Equities rank second (+£5.56bn), with mutual funds accounting for the bulk of inflows (+£4.60bn), compared with £958m for ETFs. However, September’s substantial passive equity redemptions have significantly eroded the gains accumulated earlier in the year.
Money market funds have attracted £1.08bn, with ETFs (+£712m) ahead of mutual funds (+£364m). Commodity flows also favour ETFs (+£329m), against mutual fund inflows of £72m.
Mixed-assets passive flows remain positive (+£779m), entirely through mutual funds. Overall, despite September’s reversal, passive vehicles remain a significant source of demand YTD.
Flows by Classification
Chart 6: Largest Positive and Negative Flows by LSEG Lipper Global Classification, September 2026 (£bn)
Source: LSEG Lipper
Mixed Asset GBP Aggressive – Global attracted the largest inflows in September (+£1.20bn), almost entirely active (+£1.19bn), continuing the classification’s strong showing over recent years. However, Mixed Asset GBP Flexible suffered substantial redemptions (-£1.39bn), all from active funds. Other MA classifications saw more muted moves, both positive and negative.
Bond classifications generally fared better, despite the asset class in general coming under pressure over the quarter. Bond Global GBP attracted £758m, followed by Bond Other (+£543m) and Bond Global USD (+£485m). The latter saw a pronounced passive bias (+£330m), while Bond Global GBP flows were more evenly distributed. Bond Global Short Term also attracted £150m. In contrast, Bond GBP Corporates suffered redemptions (-£605m), mainly passive (-£389m). The preference for global bond exposure is notable against a backdrop of rising sovereign yields and renewed inflation concerns.
Equities present a considerably weaker picture. Equity Global suffered the largest redemptions of any classification (-£5.09bn, much higher than August’s redemptions of about £2bn), split between active (-£2.15bn) and passive (-£2.94bn). This represents a significant departure from the strong passive demand for global equity exposure seen earlier in the year. Equity Asia Pacific ex Japan also continued to lose assets (-£989m), overwhelmingly active, despite the region’s strong performance over much of 2026.
Equity US was a rare positive exception (a rather muted +£238m), although active inflows (+£525m) were partly offset by passive redemptions (-£287m). Equity UK Income also suffered substantial outflows (-£1.86bn), entirely active.
Elsewhere, Money Market GBP shed £3.18bn, almost all active, while Real Estate UK suffered redemptions of £2.66bn. Alternatives classifications were predominantly negative, with Alternative Other (-£748m), Alternative Credit Focus (-£687m), and Alternative Multi Strategies (-£465m) all losing assets. Alternative Equity Market Neutral was the notable exception (+£285m), suggesting that equity investors are looking for strategies with some degree of downside security as the rally gets rather long in the tooth.
Chart 7: Largest Positive and Negative Flows by LSEG Lipper Global Classification, YTD 2026 (£bn)
Source: LSEG Lipper
Bond classifications dominate the positive YTD flows, with Bond Global USD attracting the largest inflows (+£7.23bn), predominantly passive (+£4.83bn). Bond Global GBP follows (+£3.69bn), with a stronger active bias (+£2.43bn), while Bond GBP Government has taken £3.06bn, almost entirely passive. Bond Emerging Markets Global LC (+£3.02bn) and Bond Global Corporates USD (+£2.01bn) also feature prominently. By contrast, Bond GBP Corporates has shed £3.31bn, highlighting the preference for global over domestic corporate exposure.
Equity Global ex UK ranks second overall (+£5.80bn), with passive inflows (+£6.89bn) more than offsetting active redemptions
(-£1.09bn). That said, inflows here are dominated by two funds from two providers: one active, one passive. Equity US attracted £3.77bn, while Equity Emerging Markets Global took £2.86bn, overwhelmingly passive.
However, Equity Global has suffered substantial redemptions (-£12.56bn), driven by active outflows (-£15.10bn), despite passive inflows (+£2.54bn). UK equities remain deeply unpopular despite recent outperformance from the UK market and its potential to act as a diversifier to the tech/AI-heavy themes that have held sway over the market to date: Equity UK (-£7.14bn), Equity UK Income
(-£6.41bn), and Equity UK Small & Mid Cap (-£3.11bn) have all suffered significant withdrawals.
Equity Europe ex UK (-£5.31bn), Equity Asia Pacific ex Japan (-£4.03bn), and Equity Japan (-£3.03bn) have also struggled despite periods of strong market performance.
Mixed-assets classifications remain positive, led by Mixed Asset GBP Aggressive – Global (+£5.22bn) and Mixed Asset GBP Conservative – Global (+£3.27bn), both overwhelmingly active.
The largest outflows are from Real Estate UK (-£27.55bn). That’s a rather startling figure. However, almost all of this is due to the consolidation of assets by one major fund provider, from active public to private; as a result, the assets disappear from our record but remain with the asset manager.
Flows: Institutional v Retail
Chart 8: Asset Class Flows, Institutional and Retail, September 2026 (£bn)
Source: LSEG Lipper
September’s £16.99bn net redemptions were dominated by institutional investors (-£13.10bn), while retail investors withdrew £3.89bn.
Equities saw the largest outflows (-£10.35bn), with institutional redemptions (-£6.70bn) considerably exceeding retail (-£3.65bn). Both investor groups were therefore reducing equity exposure, although institutional selling accounted for almost two-thirds of the total.
Real estate suffered substantial redemptions (-£2.68bn), overwhelmingly institutional (-£2.55bn), suggesting large individual allocations may be driving the unusually volatile flows seen in recent months. Money market funds also saw significant institutional withdrawals (-£2.52bn) alongside retail redemptions (-£745m).
Alternatives lost £1.66bn, again mainly institutional (-£1.37bn), while mixed-assets funds suffered more evenly distributed withdrawals (-£406m retail/-£209m institutional).
Bonds were the clear exception, attracting £1.46bn, predominantly from retail investors (+£1.22bn), with institutions contributing £237m. This continued retail demand for fixed income contrasts with the broader pattern of withdrawals across other asset classes.
Chart 9: Asset Class Flows, Institutional v Retail, YTD 2026 (£bn)
Source: LSEG Lipper
YTD net redemptions total £32.42bn, masking a striking divergence between retail investors (-£75.26bn) and institutions (+£42.83bn). This contrasts with September, when both investor groups withdrew assets.
Equities account for the bulk of retail redemptions (-£71.72bn), while institutional investors have allocated £37.78bn to the asset class. This divergence is particularly notable given the sustained weakness in overall equity flows throughout 2026.
Bonds show the opposite pattern, with institutional inflows of £27.58bn more than offsetting retail redemptions (-£6.18bn). Mixed-assets funds have also benefited predominantly from institutional demand (+£6.72bn), against modest retail withdrawals (-£809m).
Alternatives are the exception to the generally negative retail picture, attracting £1.98bn from retail investors and £854m from institutions. Overall, institutional allocations to equities and bonds have provided significant support against heavy retail withdrawals.
Flows by Promoter
Chart 10: Largest Positive Flows by Promoter, September 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted £5.50bn in September despite overall market redemptions of £16.99bn. The month’s more muted flows see a change in the makeup of the table, as smaller players make it past the industry behemoths that generally own this space.
Brooks Macdonald is one such new entrant, leading by a considerable margin (+£1.96bn), with flows dominated by equities (+£1.22bn), alongside bonds (+£416m) and alternatives (+£335m). This seems to be driven by a series of fund launches.
HSBC followed (+£793m), with money market funds (+£373m) and bonds (+£305m) accounting for most inflows. Morgan Stanley ranked third (+£697m), almost entirely through money market funds (+£704m), contrasting with the substantial withdrawals from the asset class overall.
Other new entrants include CleverM, which attracted £355m, split between equities (+£250m) and bonds (+£105m), and Ruffer, which took £349m, driven by mixed-assets funds (+£366m).
Insight (+£311m) also benefited from money market inflows (+£371m), despite mixed-assets redemptions. Dimensional (+£279m), State Street (+£273m), PIMCO (+£243m), and Vanguard (+£235m) completed the top 10.
Chart 11: Largest Positive Flows by Promoter, YTD 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted £45.85bn YTD despite overall market redemptions of £32.42bn.
As was the case last month, Vanguard leads (+£13.66bn), with equities accounting for the bulk of inflows despite the strongly negative flows for the asset class overall (+£9.24bn), followed by bonds (+£2.90bn) and mixed assets (+£1.02bn).
HSBC ranks second (+£11.32bn), with bonds dominating (+£5.57bn), alongside money market funds (+£2.97bn), equities (+£1.28bn), and mixed assets (+£1.26bn).
Amundi follows (+£5.95bn), with flows led by equities (+£2.58bn) and bonds (+£2.36bn). Legal & General (+£2.83bn) has benefited mainly from mixed-assets inflows (+£2.38bn), partly offset by commodity redemptions (-£670m).
Dimensional (+£2.30bn) and Coutts (+£2.16bn) follow, the latter almost entirely driven by mixed assets (+£2.06bn).
Northern Trust (+£2.06bn), Invesco (+£1.90bn), Brooks Macdonald (+£1.85bn), and Artemis (+£1.82bn) complete the top 10.
