Asset class
- December mutual funds and ETFs saw net flows of £8.11bn (+5.37bn excluding money market funds (MMF)), with all asset classes except real estate in positive territory.
- MMFs attracted most cash (+£2.75bn), as mixed assets followed (+£2.29bn).
Active v passive
- Active funds attracted £4.15bn (+£1.62bn ex MMFs), while passives netted £3.96bn (+£3.75bn, ex MMFs).
- Equities were the most successful passive asset class (+£2.41bn: +£2.32bn MFs; +£89m ETFs).
Classifications
- Equity UK saw its first positive flows since November 2024, netting £535m.
- Money Market GBP was the most popular classification (+£2.62bn), as it has been for seven months of the year, including throughout Q4.
Sustainable fund flows
- Net sustainable fund sales were negative by £1.13bn over December.
- Sustainable equity was the biggest loser (-£970m), despite conventional equivalents netting £1.9bn.
Asset manager
- Vanguard was the most successful fund promoter over the month, netting £1.63bn.
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to December 2025 (£bn)
Source: LSEG Lipper
UK headline CPI was 3.2% in November, its downward trajectory supporting the Bank of England’s (BoE’s) more accommodative stance. Meanwhile, the US Federal Reserve delivered its third consecutive rate cut in December as the European Central Bank (ECB) held rates steady. This supported global risk assets and helped underpin credit.
Global equities concluded the year with strong returns, particularly across Europe and the UK. Non-US developed markets led gains, driven by cyclical and value sectors. The FTSE 100 had its best annual performance since 2009, up about a quarter over the year, supported by dividend-rich, “old economy” sectors as the BoE initiated policy easing. The index finished December positively.
Over 2025, £34.59bn has been redeemed from UK funds (-£71.79bn excluding MMFs). In positive territory, MMFs (+£23.03bn), alternatives (+£2.15bn), commodity funds (+£753m), and mixed assets (+£423m) have seen inflows—the latter pulled from YTD redemptions by December seeing the strongest flows since April. However, equity funds (-£59.7bn) and real estate (-£1.26bn) have all suffered redemptions over the year.
Note that we will be reviewing the UK fund market over 2025 in greater detail shortly.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, December 2025 (£bn)
Source: LSEG Lipper
If the end of the year didn’t quite bring joy to the world, it did provide some good cheer to asset managers. UK flows had been on an upward trend since October, which saw redemptions of £17.98bn (-£21.44bn ex MMF). November recovered to +£1.28bn
(-£5.38bn ex MMF), and December moved significantly into positive territory (+£8.11bn/+£5.37bn ex MFF).
Active funds attracted £4.15bn (+£1.62bn ex MMFs), while passives netted £3.96bn (+£3.75bn, ex MMFs).
As had been the case over the past two months, MMFs did best (+£2.75bn, with £220m to passives). Mixed assets followed (+£2.29bn), almost all to active strategies. Bonds attracted £1.76bn (+£519m active/+£1.24bn passive), then equity at £930m, with a significant rotation from active (-£1.48bn) to passive (+£2.41bn). Alternatives (+£380m) and commodities (+£42m) were all in positive territory, predominantly to active funds.
Real estate was the only asset class to see redemptions (-£32m, all active).
ETFs and Passive Mutual Funds
Chart 3: Passive Asset Class Flows, Mutual Funds v ETFs, December 2025 (£bn)
Source: LSEG Lipper
Passive mutual funds saw inflows of £3.64m, while ETFs attracted £323m.
December saw passive equity flows go from last to first, with mutual funds netting £2.32bn and ETFs £89m.
Almost all passive asset classes were in positive territory: bonds (+£1.24bn: +£1.08bn MFs; +£161m ETFs), followed by MMFs (+£220m: +£158m MF; +£62m ETF), mixed assets (+£82m, all MF), and commodity funds (+£24m: +£8m MF; +£16m ETF).
Only alternatives saw passive redemptions over the month (-£5m).
Flows by Classification
Largest Inflows
Chart 4: Largest Positive Flows by LSEG Lipper Global Classification, December 2025 (£bn)
Source: LSEG Lipper
Money Market GBP once again led the pack (+£2.62bn), as it has done for seven months of the year, including throughout Q4. Almost all flows were to active funds.
Source: LSEG Lipper
Two Mixed Asset GBP Global classifications follow—Aggressive (+£1.83bn) and Balanced (+£601m), both predominantly to active strategies.
Source: LSEG Lipper
Notably, December sees the first positive flows for Equity UK since November 2024, despite the strong performance for the UK market over the year. The last positive month prior to that was March 2022. Flows this December were £535m, split pretty equally between active and passive strategies. The classification comes just behind the most popular equity classification for the month, Equity Emerging Markets Global (+£583m: +£138m active; +£445m passive).
Overall, it’s a much more positive month for equity classifications at the top of the table, where the asset class was absent in November. Equity US comes in at fifteenth place despite reported investor concerns over the market’s valuations (+£ 210m).
Bond Global USD (+£528m) and Bond Global High Yield USD (+£478m) were the most popular fixed income classifications for the month. The largest contributor to the £382m to Alternative Credit Focus inflows was £262m to a private credit LTAF.
Some £381m of the flows to Unclassified were to a physical gold ETF.
Largest Outflows
Chart 5: Largest Outflows by LSEG Lipper Global Classification, December 2025 (£bn)
Source: LSEG Lipper
Investment-grade credit outperformed government bonds over December, with tight spreads in North American IG, and especially strong performances in Eurozone periphery credit. While long-dated sovereign yields edged higher, spreads compressed amid reduced issuance and dovish signals from major central banks. Despite this positive picture for corporates, Bond Global Corporates GBP saw the largest outflows (-£627m: -£246m active; -£380m passive).
Bond GBP Corporates (-£189m) and Bond GBP (-£137m) also suffered, indicating an investor preference for USD bonds and against GBP over the month, as was also implied in November.
The renewed interest in UK equities was not a tide that floated all boats, as Equity UK Income continued to suffer outflows (-£303m: -£331m active; -£29m passive), as did Equity UK Small & Mid-cap funds (-£205m: -£194m active; -£12m passive).
Equity Asia Pacific ex Japan (-£259m) also suffered, as did Equity Global (-£173m), despite the latter enjoying significant passive inflows (+£571m). Equity Europe also suffered outflows, despite a positive year (-£47m).
Sustainable Fund Flows
Chart 6: Sustainable Asset Class Flows, December 2025 (£bn)
Source: LSEG Lipper
Net sustainable fund sales were negative by £1.13bn over December, down on a flat November.
Commodity (+£7m), bond (+£4m), and alternatives (+£1m) barely moved the dial, though they were the only classifications to see positive flows. As can be seen from the table below, GBP-denominated funds did best over the month, despite investors shunning sterling fixed income overall in the month.
Source: LSEG Lipper
Sustainable equity was the biggest loser (-£970m), despite conventional equivalents netting £1.9bn. Sustainable MMFs (-£132m) and mixed assets (-£44m) also saw redemptions.
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, December 2025 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted 52.4% of the total inflows for the month—in contrast to the previous month’s 66%.
Vanguard was the most successful over the month, netting £1.63bn, split between equity funds (+£759m), followed by bonds (+£605m) and mixed-assets funds (+£184m), with the rest going to MMFs.
Source: LSEG Lipper
Legal & General followed, with inflows of £1.26m, dominated by MMF sales (+£854m), and equities taking £248m.
Source: LSEG Lipper
