Asset class view
- Despite the sharp Q2 rebound in equity markets, June’s UK fund flows were -£15.29bn (-£10.53bn ex-MMFs).
- Over H1, only MMFs (£7.08bn), equity funds (£1.46bn), and commodity funds (£638m) have seen net inflows, with bonds suffering the worst redemptions (-£8.54bn).
Active v passive
- Over June, equities fared best, netting £1.36bn (£283m active/£1.08bn passive).
- Of the £2.94bn of passive redemptions, mutual funds saw outflows of £3.86bn, while ETFs netted £920m.
Classifications
- Equity Global (£2.22bn) again beat Equity US to the top slot, the latter netting £1.43bn.
- Target Maturity Other (-£5.83bn) saw the greatest redemptions over the month.
Sustainable fund flows
- H1 saw net outflows of £655m (-£792m ex-MMFs) from sustainable funds. This compares to net flows of
-£5.98bn and -£12.93bn, respectively.
- Bond funds (£22m) and real estate (-£20m) were the only sustainable asset classes to see net inflows in June.
Asset manager view
- Fidelity International saw the largest inflows, netting £625m, dominated by passive equity products.
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to June 2025 (£bn)
Source: LSEG Lipper
Q2 saw a reverse of much of the negative sentiment that had bedeviled markets over Q1, even if few of the underlying factors, such as the uncertainty of the magnitude and impact of tariffs, seemed to have been dispelled. The US’ pause in full tariff implementation, combined with businesses front-running imports, both moderated any immediate impact, and give markets confidence, as they not so much as climbed a wall of worry as pole-vaulted over it.
The global tech rally resumed, and equities were up broadly, in one of the sharpest equity recoveries ever, post the early-April nosedive. The VIX and high-yield spreads both headed downwards from early April to the end of H1.
Nevertheless, flows to risk assets have been subdued, both for June and for H1 2025. YTD, only MMFs (£7.08bn), equity funds (£1.46bn), and commodity funds (£638m) have seen net inflows. Meanwhile, bonds (-£8.54bn), mixed assets (-£6.31bn), real estate (-£582m) and alternatives (-£381m) were all in the red. Mixed assets had been up until June, and a huge outflow turned positive to negative this month. That’s fairly concentrated, and something we’ll lift the lid on in due course.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, June 2025 (£bn)
Source: LSEG Lipper
Despite the sharp rebound in equity markets that continued into June, flows were net negative for the month, with outflows of £15.29bn (-£10.53bn ex-MMFs). Active funds suffered outflows of £12.36bn (-£7.56bn ex-MMFs) and passives were in the red by £2.94bn (-£3bn ex-MMFs).
Equities fared best: £1.36bn (£283m active/£1.08bn passive), followed at some distance by real estate (£5m). Commodity funds netted £1m (-£8m active/£9m passive).
On the debit side of the ledger, mixed assets shed £8.7bn, mainly active, MMFs £4.74bn (likewise), bonds were down £3.09bn (+£1.156bn active/£4.25bn)—reversing their strong inflows in May—and alternatives shed £133m. The bond active/passive split is worthy of note, as this is a reversal of the rotation of active fixed income assets into passive. Possibly investors are finally heeding bond active managers’ warnings that passive fixed income investing merely allocated most capital to the most indebted entities, and this may be somewhere they should consider that they do not want to be when markets turn. As it has a way of doing, time will tell.
ETFs and Passive Mutual Funds
Chart 3: Passive Asset Class Flows, Mutual Funds v ETFs, June 2025 (£bn)
Source: LSEG Lipper
Of the £2.94bn of passive redemptions in June, mutual funds saw outflows of £3.86bn, while ETFs netted £920m.
Passive equities’ take of £1.08bn was split £631m mutual funds to £488m ETFs, while bond passive mutual funds shed £4.65bn as their ETF equivalents took £402m. Commodities’ entire £9m went to ETFs, while passive alternative mutual funds took £10m as their ETF peers shed £3m.
Flows by Classification
Largest inflows
Chart 4: Largest Positive Flows by LSEG Lipper Global Classification, June 2025 (£bn)
Source: LSEG Lipper
Equity Global (£2.22bn: active £2.92bn/passive -£697m) again beat Equity US to the top slot, the latter netting £1.43bn (active £211m/passive £1.22bn). The four ACS funds in the table immediately below give something of a misleading impression, as these are largely moves between share classes within the fund, or within the range.
Source: LSEG Lipper
However, it is interesting that we seem to be seeing a reversal of a trend with both these classifications: when money was flooding into Equity US, it was largely to active funds (albeit often very competitively priced institutional share classes), and Equity Global cash went to passives. That’s not the case now. Another factor impacting this could be the decline in popularity of sustainable investing (see chart 6), which took the lion’s share of the cash with these two classifications previously.
Source: LSEG Lipper
Despite the heavy redemptions from bond funds this month (and YTD), six of the top-10 classifications are fixed income: Bond Global USD (£478m); Bond GBP Government (£388m); Bond Global GBP (£357m); Bond GBP Short Term (£318m); Bond Other (£303m); and Alternative Credit Focus (£282m).
While Mixed Asset GBP Aggressive (£1.21bn) has been a perennial favourite, Mixed Asset GBP Conservative (£416m) has not, with this and its Balanced peer seeing heavy outflows from 2022. It’s likely this is as a result of both being used as bond proxies during the long, low rate environment, plus investors’ dissolution with their performance as rates rose. Possibly this is an indication that this is now coming to an end, although Mixed Asset GBP Balanced still suffered outflows of £212m in June.
Largest Outflows
Chart 5: Largest Outflows by LSEG Lipper Global Classification, June 2025 (£bn)
Source: LSEG Lipper
It’s unusual to see Target Maturity Other (-£5.83bn) with the greatest redemptions, but this seems to be a result of highly concentrated shifts, with fund closures—and likely a similar situation with Mixed Asset GBP Flexible (-£4.03bn).
The £5.39bn outflow from Bond Global Corporates LC is largely the result of redemptions from one tracker fund, so one big call and not a general rush for the exit, however significant that one decision is.
UK equities continue to suffer (Equity UK: -£1.12bn; Equity UK Income, -£608m). Pension funds have been dumping UK equities for decades, but recent news that Scottish Widows was shifting from UK to more globally focused benchmarking indicates that there is more pain to come.
The £335m redemptions from Bond USD Government funds may indicate hesitancy of the haven status of Treasuries, but with £872m of outflows over H1, this doesn’t quite seem like a rush for the exits either.
Sustainable Fund Flows
Chart 6: Sustainable Asset Class Flows, June 2025 (£bn)
Source: LSEG Lipper
Net sustainable flows remain muted. Indeed, over H1, there were net outflows of £655m (-£792m ex-MMFs). This compares to net flows of negative £5.98bn and negative £12.93bn, respectively. This compares unfavourably to 2024, when sustainable funds took £15.24bn (£14.92bn ex MMFs). However, the environment differs given the overall redemptions in the market.
Sustainable funds in June saw net outflows of £289m (-£83m ex MMFs), compared to negative £13.41bn and negative £10.55bn, respectively, for conventional funds.
Source: LSEG Lipper
Bond funds (£22m) and real estate (-£20m) were the only sustainable asset classes to see net inflows, with investors favouring USD and EUR corporates and high-yield funds (see table above).
Source: LSEG Lipper
The £20m inflows to real estate were due to one Real Estate UK fund, AI Climate Transition RealAssets LTAF Ins Pen Acc1.
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, June 2025 (£bn)
Source: LSEG Lipper
Muted flows, with no company taking as much as a billion, and a very different looking leaderboard for June.
Fidelity International saw the largest inflows, netting £625m, dominated by passive equity products, with £344m to equity funds, £84m to mixed assets, and £48 to bonds.
Source: LSEG Lipper
TwentyFour comes second (£492m), with £342m to bond funds, and £150m to alternatives, dominated by Alternative Credit Focus vehicles (see table below).
Source: LSEG Lipper
