Asset class view
- Over Q1, long-term assets suffered outflows of £11.42bn, while money market funds (MMFs) netted £8.28bn.
- In March, equity funds saw redemptions of £2.49bn, while bonds were in the red by £1.5bn.
Active v passive
- Passive funds had their second consecutive negative month, with outflows of £1.98bn.
- Passive bonds suffered most, with outflows of £643m from mutual funds and £442m from ETFs.
Classifications
- Money Market GBP funds were the most popular classification for the month, attracting £3.27bn.
- Although Q1 saw UK equities outperform both global and US equities, Equity UK suffered March outflows of £2.88bn.
Sustainable fund flows
- March’s sustainable funds were negative £661m, while conventional funds saw outflows of £7.21bn).
- Mixed assets were the only sustainable asset class in the black, attracting £354m.
Asset manager view
- DWS was March’s top money-taker, netting £1.44bn, mainly through £1.134bn to MMFs.
Flows by Asset Class
Three-year flows
Chart 1: Asset Class Flows, 36 Months, to March 2025 (£bn)
Source: LSEG Lipper
This month’s report is titled “Disquiet Before the Storm” for good reason. While April’s market moves—whether global equity falls or US Treasury yield rises—were dramatic, they didn’t come out of the blue, with major global equity markets trending downwards since mid-February. It’s therefore not too surprising to see long-term asset flows for the month being in the red to the tune of £5.74bn.
Over Q1, long-term assets suffered outflows of £11.42bn, while MMFs netted £8.28bn. Equity funds have suffered most, with Q1 outflows of £7.39bn. The last positive month for the asset class was November 2025. Bonds funds have seen outflows of £3.01bn in Q1, with mixed assets shedding £734m, real estate losing £338m, and commodity funds down £38m. Conversely, alternatives netted £118m, despite a negative March.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, March 2025 (£bn)
Source: LSEG Lipper
Aggregate mutual fund and ETF flows were negative £1.51bn for March, or negative £4.72bn, excluding MMFs. The latter took £3.22bn.
Equity funds saw redemptions of £2.49bn, split £1.5bn active/£998m passive, while bonds were in the red by £1.5bn (£419m active/£1.08bn passive). Mixed assets saw outflows of £569m, their passive versions took £96m—unusual, in what is an active-dominated asset class.
While alternatives shed £176m, real estate had a relatively rare positive month (the last one was July 2024) of £9m.
As an aside, while there has been much focus on gold in this environment—I’ve spoken with grizzled financial professionals who were amazed the yellow stuff is still physically shipped from A to B, rather than just electronically, screen-to-screen—this has seen little reflection in the fund space. Commodity funds overall netted just £9m over the month, with all of those in positive territory being generalist funds, and (jumping ahead to the content of chart 4) Equity Sector Gold & Precious Metals took just £8m for the month.
ETFs and Passive Mutual Funds
Chart 3: Passive Asset Class Flows, Mutual Funds v ETFs, March 2025 (£bn)
Source: LSEG Lipper
Passive funds had their second consecutive negative month, with outflows of £1.98bn. Of this, mutual funds shed £1.25bn and ETFs £728m. Passive bonds suffered most, with outflows of £643m from mutual funds and £442m from ETFs, followed by passive equities, where the numbers were £673m and £325m, respectively.
As noted above, the one asset class in the black (excluding commodity’s £2m), was mixed assets, which attracted £96m.
Flows by Classification
Largest inflows
Chart 4: Largest Positive Flows by LSEG Lipper Global Classification, March 2025 (£bn)
Source: LSEG Lipper
Money Market GBP funds were the most popular classification for the month, attracting £3.27bn. While yield curves are steepening, making longer-term assets more attractive by this metric, the risk-on sentiment (or “yippy”, if you will) were likely enough to counter this.
Source: LSEG Lipper
While US large and small caps underperformed global equities over the quarter, you wouldn’t know it to look at the flows. While subdued relative to the Mag7 gold rush of 2024, Equity US funds took £2.64bn in March, and ££4.55bn for the quarter. However, what is interesting is the return to favour of equal weighted S&P 500 trackers (see table below). When I last looked at this back in November, the trend had moved decisively back to cap-weighted US passives. What’s also of note is that over the past year, the lion’s share of the money going to this classification had been to actively managed strategies. In March, only £610m of the £2.64bn was to such funds—again, as indicated in the table below. The top seven funds by March flows are all passive.
Source: LSEG Lipper
Mixed Asset GBP Conservative had a surprisingly strong month, netting £476m, £134m to passives. Surprising, as Conservative and Balanced MA funds have suffered significant outflows over the past couple of years, with the former shedding £2.67bn over 12 months, despite a positive Q1. We’ve surmised that this was to a large degree because they had been used as bond proxies (with an equity kicker) over the low-rate years—a trade which has reversed as rates climbed and decent yields were once again available on bonds. Do these positive figures indicate that this has finally unwound? Too early to say, we reckon, especially given the inflows are concentrated on quite a small set of funds.
Largest Outflows
Chart 5: Largest Outflows by LSEG Lipper Global Classification, March 2025 (£bn)
Source: LSEG Lipper
Q1 saw UK equities outperform both global and US equities. Nevertheless, investors continue to shun them, with Equity UK suffering March outflows of £2.88bn (£2.15bn passive/£723m active); Equity UK Small & Mid Cap negative £428m; and Equity UK Income negative £351m. What, you have to wonder, does an equity market have to do to get attention round here? There is likely to be a structural issue at play: most UK equity investors are domestic, while UK pension funds arguably don’t have that many more UK equities to sell, the shift from UK to global benchmarks by wealth managers is an ongoing headwind.
Equity Sector Real Estate Global suffered £1.2bn of redemptions, accounted for by one passive fund’s share class.
Interesting that, despite the weakening dollar over the quarter and rising US yields, it seems to be mainly sterling-denominated bond assets that are suffering: Bond GBP Corporates (-£1.06bn); Bond Global GBP (-£352m); and Bond Global High Yield GBP (-£422m). I take a closer look at Global High Yield here. Indications that investors may be getting nervous over the Treasury market, however, are the £384m redeemed from Bond USD Government funds.
Sustainable Fund Flows
Chart 6: Sustainable Asset Class Flows, March 2025 (£bn)
Source: LSEG Lipper
It has been a long time since mixed-assets funds benefited from much sustainable interest, and March sees them being the only sustainable asset class in the black (£354m), with aggregate sustainable flows being negative £661m (conventional funds, by comparison, saw outflows of £7.21bn).
Source: LSEG Lipper
Sustainable bond flows suffered redemptions of £441m, equities £360m, and MMFs £190m. Those sustainable equity funds that did attract money were dominated by Equity US and Equity Global, as indicated by the table below. These accounted for the top eight equity funds between them, and £1.2bn of assets.
Source: LSEG Lipper
The Sustainable Fund Flows section has a narrower and stricter focus than those which indicate some form of ESG strategy in their fund documentation—to a smaller group of sustainable funds, defined as all SFDR article 9 funds plus all Lipper Responsible Investment Attribute funds reduced to those containing indicative sustainable keywords in the fund name.
Flows by Promoter
Chart 7: Largest Positive Flows by Promoter, March 2025 (£bn)
Source: LSEG Lipper
DWS was March’s top money-taker, netting £1.44bn, mainly through £1.134bn to MMFs and also £111m to equity funds.
Source: LSEG Lipper
Insight takes second place for the month, with net flows of £1.43bn, with £1.66bn to MMFs. Northern Trust’s flows (£901m) were also dominated by MMFs.
Source: LSEG Lipper
