Asset class
- Net flows were negative for the fourth consecutive month (-£5.09bn; -£3.89bn ex-MMFs)
- Bond funds fared best (+£1.14bn), and equities worst (-£5.22bn)
Active v passive
- Active strategies saw outflows (-£5.48bn/-£4.22bn ex MMFs), while passives benefited from inflows (+£395m/+£333m ex MMF)
- Passive equity mutual funds shed £1.02bn, although ETFs attracted £392m, particularly to US large caps
Classifications
- September’s best-selling classification was Bond GBP Government (+£618m)
- Equity Global funds were the biggest losers (-£2.11bn), followed by Money Market GBP (-£951m)
Sustainable fund flows
- Net sustainable fund sales in September were -£1.29bn, as conventional funds saw net outflows (-£3.8bn)
- Sustainable equity funds saw significant redemptions (-£1.51bn). Equity Global funds were the heaviest losers
Asset manager
- Legal & General was the most successful over the month, netting £1.26bn, mainly to MMF (+£1.13bn) and equity (+£228m)
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to September 2025 (£bn)
Source: LSEG Lipper
Despite geopolitical risks and concerns over stretched equity valuations, the third quarter of 2025 saw a continuation of the global risk rally that began in April.
Nevertheless, despite rising markets, Q3 was consistently negative for equity fund flows (-£42.05bn), with their nadir being in July, and YTD redemptions for the asset class were the largest (-£36.19bn).
Although August and September were positive for bond fund flows, YTD the asset class is well into the red (-£9.06bn). Mixed assets are also in negative territory YTD (-£2.76bn), as is real estate (-£755m).
On the plus-side of the ledger sit MMFs (+£3.31bn), alternatives (+£1.02bn) which have seen three straight months of inflows, and commodities (+£675m, most of which in May).
In aggregate, there have been £43.75bn of redemptions from mutual funds and ETFs YTD (-£47.06 ex MMFs).
The turquoise bar on the far left of the chart—a reminder of the after-effects of the 2022 mini-budget—will disappear in next month’s report, hopefully making the remaining bars more legible. Always assuming we don’t get another upset…
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, September 2025 (£bn)
Source: LSEG Lipper
Net flows were negative for the fourth consecutive month (-£5.09bn; -£3.89bn ex-MMFs): higher than in August, but nothing like the scramble for the exits we saw in July (-£35.3bn ex MMF).
Active strategies saw outflows (-£5.48bn/-£4.22bn ex MMFs), while passives benefited from inflows (+£395m/+£333m ex MMF), recovering from August’s £1.43bn outflows.
September’s rankings look like August’s: bond funds fared best (+£1.14bn: +£271m active/+£871m passive), followed by alternatives (+267m, all active) and commodity funds (+£13m).
All other asset classes were in the red: real estate (-£31m, all active); mixed assets (-£66m: -£143m active/+£77m passive); MMF (-£1.19bn, all active, with small passive inflows). As was the case last month, equities suffered the largest redemptions, despite the positive market environment (-£5.22bn: -£4.59bn active/-£627m passive). In August, active equity strategies had bucked the trend, taking money.
ETFs and Passive Mutual Funds
Chart 3: Passive Asset Class Flows, Mutual Funds v ETFs, September 2025 (£bn)
Source: LSEG Lipper
Passive mutual funds saw modest outflows of £54m, while ETFs netted £449m.
As has been the case over Q3, passive bonds funds were the most successful in September (+£885m: +£871m MF; -£14m ETF), followed by mixed assets (+£76m, with £1m to ETFs).
Passive equity mutual funds shed £1.02bn, although ETFs attracted £392m, particularly to US large caps.
Flows by Classification
Largest Inflows
Chart 4: Largest Positive Flows by LSEG Lipper Global Classification, September 2025 (£bn)
Source: LSEG Lipper
Fiscal concerns remained front and centre in the UK, where yields rose across the curve over Q3 despite a 25 basis-point (bps) rate cut by the Monetary Policy Committee. These rates may be what is attracting investors to September’s best-selling classification, Bond GBP Government (+£618m: -£82m active, +£800m passive). The attractions of passive management—cost—are easier to see in with DM govvies, as there is arguably less of a need to actively select one’s exposure, but rather to lock into the yields on offer, with spread tightness persisting in the bond market. Likewise, the £175m to Bond Global USD has a strong tilt to government securities, and a more pronounced rotation from active to passive.
US investment grade bucked YTD trends to lead their respective high-yield equivalents in Q3, according to FTSE Russell research. Flows into Bond Global Corporates USD (+£331m: +£172m active/+£159m passive) had a tilt to passive and shorter dated, although the top-seller for the month is more actively managed: Federated Hermes Sustainable Global Investment Grade Credit Fund (+£177m).
Source: LSEG Lipper
Mixed Asset GBP Aggressive slips from first to second place (+£613m: +£588m active/+£25m passive).
Source: LSEG Lipper
The FTSE Russell 2000, Emerging, Japan, and FTSE Russell 1000 indices outperformed FTSE All-World, while the Asia Pacific, FTSE 100, Eurozone, and FTSE 250 indices lagged in Q3. However, Equity US was pretty much the only equity game in town, with passives making all the gains in this classification (+£349m: -£270m active/+£619m passive). It’s instructive that no other equity classification makes the top-10 (unlike in August, where Equity Global came in behind Equity US). Instead, one must drop to fifteenth place for Equity Global Income, with a relatively modest £71m inflow.
It seems that, for all the minor-key mood music, the market is on board with the narrative that the impact of tariffs is priced in, and that AI is still running hot. While the music plays…
Largest Outflows
Chart 5: Largest Outflows by LSEG Lipper Global Classification, September 2025 (£bn)
Source: LSEG Lipper
Equity Global funds were the biggest losers over the month (-£2.11bn: -£1.43 active/-£679m passive), followed by Money Market GBP (-£951m).
UK equities lagged over the quarter, though are still ahead YTD. Nevertheless, UK funds across large, SMID, and Income categories shed £1.69m over September. Other equity markets that have outperformed the US YTD, but which suffered redemptions over the month, were Equity Asia Pacific ex Japan (-£514m), Equity Europe ex UK (-£267m), and Equity Emerging Markets Global (-£137m).
Outside of the table, in sixteenth place, Equity US Small & Midcap funds shed £145m, all through active funds, despite the strong performance of the FTSE Russell 2000 over the quarter.
Sustainable Fund Flows
Chart 6: Sustainable Asset Class Flows, September 2025 (£bn)
Source: LSEG Lipper
Net sustainable fund sales in September were -£1.29bn, reversing the previous month’s positive flows, as conventional funds saw net outflows (-£3.8bn).
Sustainable bonds fared best (+£277m), in line with inflows for the asset classes’ conventional funds (+£865m), with Bond Global Corporates USD funds dominating (see table below).
Source: LSEG Lipper
Sustainable MMFs also saw modest inflows (+£131m), despite significant outflows for their conventional peers (-£1.33bn).
Source: LSEG Lipper
Sustainable mixed-assets funds suffered outflows (-£178m) as their conventional peers netted £112m.
However, the largest sustainable redemptions were from equity funds (-£1.51bn, compared to -£3.71bn for their conventional peers). Equity Global funds were the heaviest losers, tallying with what we observed in chart 5, above. The four share classes of sustainable funds that saw the heaviest outflows (-£1.86bn) were all Equity Global.
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, September 2025 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted 60.7% of the total inflows for the month—slightly higher than the previous month.
As was the case in August, Legal & General was the most successful over September, netting £1.26bn, mainly to MMF (+£1.13bn) and equity (+£228m).
Source: LSEG Lipper
Vanguard followed, with inflows of £1.17bn, mainly to equity (+£705m), bond (+£269m), and mixed assets (+£119m).
Source: LSEG Lipper
