Asset class
- Total net flows were the second worst since September 2022 (-£17.98bn versus -£27.81bn), with the fourth consecutive month of redemptions.
- Money market funds fared best (+£3.46bn) and equities worst (-£21.87bn)
Active v passive
- Active funds saw outflows of £4.61bn as passives shed £13.37bn
- Passive bond funds reversed their successes of recent months, with outflows of £2.3bn from mutual funds, although bond ETFs netted £266m
Classifications
- October’s best-selling classification was Money Market GBP (+£3.34bn)
- Equity Global funds were the biggest losers (-£8.29bn), followed by Equity US (-£4.48bn)
Sustainable fund flows
- Net sustainable fund sales in October were -£3.78bn, as conventional funds saw outflows of £21.44bn
- Sustainable equity funds saw significant redemptions (-£3.44bn sustainable/-£18.43bn conventional)
Asset manager
HSBC was the most successful over October, netting £3.44bn, mainly to bond funds (+£2.75bn)
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to October 2025 (£bn)
Source: LSEG Lipper
Equity markets continued to rise over October, with most bond markets also in positive territory. PMIs in the US, UK, and Eurozone indicated positive growth, albeit with Japan’s manufacturing PMI being slightly lower for the month. However, tariff concerns persist, with Canada and Japan’s central bank raising concerns.
How has this broadly positive news impacted UK fund flows? Well, we finally had the 36-month runoff of the £60bn-plus spike into money market funds (MMF) from October 2022, “normalising” the y-axis. However, the largest ever equity outflows in July 2025 (-£34.65bn) have been joined by an October spike (-£21.87bn).
Year-to-date, this totals to £55.9bn redemptions from equity funds. In aggregate, there have been £49bn redemptions from mutual funds and ETFs by UK investors YTD. Discount MMF flows, and £98.71bn have been redeemed from long-term funds. Bond funds have shed £4.91bn, followed by mixed assets (-£2.09bn) and real estate funds (-£1.14bn).
On the positive side of the ledger, we find MMFs (+£13.49bn), alternative funds (+£915m), and commodities (+£687m).
So, while financial markets globally claw their way upwards, UK investors—in aggregate, at least—are going against the grain and taking cash off the table.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, October 2025 (£bn)
Source: LSEG Lipper
At -£17.98bn (-£21.44bn ex MMF), total net flows were the second worst since September 2022 (-£27.81bn). Active funds saw outflows of £4.61bn as passives shed £13.37bn.
MMFs did best (+£3.46bn, almost all to active funds), followed by bonds (+£1.41bn: +£3.44bn active/-£2.06bn passive). The reversal of the trend to passive funds in the asset class is notable. Catalysed by the bond market ructions of 2022, passive bond funds now have a larger percentage of the UK market than their equity peers (43.5% versus 40.1%). However, YTD bond ETFs are in positive territory, while both active and passive mutual funds are in the red.
While active bond fund managers have criticised passive bond funds because indices weigh allocations to issuance, so the most indebted entities have the largest positions in vanilla indices. That doesn’t seem to have dented passive bond flows, possibly because of the low level of defaults and the increasing credit quality in major indices (both IG and HY), but are we now seeing this beginning to reverse?
Commodities also saw modest inflows (+£11m).
Equities suffered the worst outflows (-£21.87bn: -£10.38bn active/-£11.5bn passive). Mixed assets also saw redemptions
(-£662m: -£747m active/-£87m passive), as did alternative (-£261m) and real estate (-£65m).
ETFs and Passive Mutual Funds
Chart 3: Passive Asset Class Flows, Mutual Funds v ETFs, October 2025 (£bn)
Source: LSEG Lipper
Passive mutual funds saw outflows of £2bn, while ETFs netted £127m. Of late, ETF flows have fended off negative territory in aggregate, although only modestly. There’s an interesting contrast to the general trend in Europe, where they are much more widely used, especially in the equity space (see here, chart 3).
As indicated in chart 3, passive bond funds reversed their successes of recent months, with outflows of £2.3bn from mutual funds, although bond ETFs netted £266m. Equity passives redemptions were strongly skewed to mutual funds (-£11.28bn MF/-£217m ETF).
Flows by Classification
Largest Inflows
Chart 4: Largest Positive Flows by LSEG Lipper Global Classification, October 2025 (£bn)
Source: LSEG Lipper
This report has been published since the fourth quarter of 2020, and I believe it’s the first time that there hasn’t been a single equity classification in the top-10 best sellers. Indeed, the top-selling equity sector is Alternative Equity Market Neutral (£99m), at nineteenth place, followed by Equity Frontier Markets (£57m) at twenty-fourth. Even in a profoundly risk-on market, as we saw in July 2025, there would be a rotation from one geography to another. While equity redemptions are not as great as then, they do seem to be more broadly based.
Often, when the asset class data suggests a clear risk-on or risk-off period, drilling down to the classification level shows a more nuanced view. October is not one of those months. The data screams risk-on. In line with this mood music, Money Market GBP funds took the most assets—indeed, they were the only classification to attract more than £1bn (+£3.34bn, almost all active money).
Source: LSEG Lipper
Bond Global Corporates USD came in second (+£863m: +£619m active/+£243m passive), followed by Bond GBP Corporates (+£626m: +£269m active/+£356m passive). The latter is one of the few bond classifications taking significant money this month, where passives have done better than active.
Source: LSEG Lipper
Short-term bond funds continue to attract investor interest: Bond Global Short Term (+£394m) and Bond GBP Short Term (+£149m). And, despite the redemptions suffered by mixed-assets funds, both Mixed Asset GBP Aggressive – Global (+£573m) and Mixed Asset GBP Conservative – Global (+£338m) proved popular over the month.
Largest Outflows
Chart 5: Largest Outflows by LSEG Lipper Global Classification, October 2025 (£bn)
Source: LSEG Lipper
European equities that had outperformed during H1 2025 have lagged global peers over Q3 and October. Over the month, Asia Pacific and Japan indices outperformed FTSE All-World, while the Russell 1000, Emerging, Russell 2000, FTSE 100, Eurozone, and FTSE 250 indices lagged, according to FTSE Russell analysis.
However, this positive equity market environment was not reflected in flows, with a broad sell-off.
Equity Global funds were the biggest losers for the second consecutive month (-£8.29bn: -£3.82bn active/-£4.45bn passive). This was followed by Equity US, reversing the previous months strong inflows (-£4.48bn: -£1.42bn active/-£3.06bn passive). Equity UK (-£3.1bn), and Equity Europe ex UK (-£1.31bn). Stronger performance did not spare Equity Japan (-£928m) nor Equity Asia Pacific ex Japan (-£903m). Just outside the table, it’s no surprise to see Equity Sector Information Technology funds sell off (-£408m).
Is this an example of the cold winds of AI scepticism blowing through UK investors earlier than their global peers? It seems likely, though as the theme is not sector specific, one cannot go further than “probable”. What’s more, valuations in most main equity markets are close to or at historically high valuations. The case is therefore not difficult to make.
Bond Global Corporates GBP (-£928m: -£86m active/-£841bn passive) and Bond GBP Government, which saw the largest inflows in September (-£671m: -£40m active/-£631m passive). Regarding the latter, note that this happened at a time before bond investors were spooked by budgetary concerns, and when 7-10 year gilt yields were declining.
Sustainable Fund Flows
Chart 6: Sustainable Asset Class Flows, October 2025 (£bn)
Source: LSEG Lipper
Net sustainable fund sales in October were -£3.78bn, down on the previous month’s -£1.29bn. Conventional funds saw outflows of £21.44bn. Sustainable takings for asset classes in positive territory were thin: MMF (+£44m) and alternatives (+£5m). Equities saw the heaviest outflows (-£3.44bn sustainable/-£18.43bn conventional), as had been the case in September. The top five of those that managed to buck the trend are listed below.
Source: LSEG Lipper
Despite positive flows for conventional bond funds (+£1.43bn), their sustainable peers were in the red, albeit slightly (-£21m).
Source: LSEG Lipper
Sustainable mixed-assets funds suffered outflows (-£362m) as their conventional peers lost £300m.
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, October 2025 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted 67% of the total inflows for the month—seven percentage points higher than the previous month.
HSBC was the most successful over October, netting £3.44bn, mainly to bond funds (+£2.75bn)—somewhat unusual for a provider in pole position over a month where MMFs were the most successful asset class. HSBC’s take here was a relatively modest £323m.
Source: LSEG Lipper
Vanguard followed, as was the case last month, with inflows of £888m, mainly to bond (+£688m) and MMFs (+£202m).
Source: LSEG Lippe
