Bonds Drive Strongest Flows of 2026
Asset class
- Net flows for May 2026 were +£8.37bn, taking YTD flows to +£13.44bn
- Bond funds saw the largest monthly inflows of the decade (+£5.68bn), while equities suffered the heaviest redemptions (-£1.47bn)
Active v passive
- Passive funds dominated May flows (+£7.24bn), while active funds were also positive (+£1.13bn)
- Equities saw strong YTD active-to-passive rotation: active funds shed £14.64bn, while passive attracted +£8.54bn
Classifications
- Bond Global USD attracted the largest May inflows (+£2.94bn), mainly to passive funds (+£2.55bn)
- Mixed Asset GBP Aggressive – Global has dominated YTD flows, attracting £8.54bn
Asset manager
- HSBC led May sales (+£3.06bn), with flows dominated by money market funds (+£1.46bn) and bonds (+£1.12bn)
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to May 2026 (£bn)
Source: LSEG Lipper
Bond flows soared, seeing the largest monthly flows of the decade (+£5.68bn), bringing YTD inflows to £6.25bn. May’s easing in yields helped the asset class, and flows by classification show a clear preference for global exposure: Bond Global USD has attracted £2.69bn, while Bond GBP Government has taken £2.05bn. The top five bond fund share classes alone took £2.6bn,and were all either Bond Global GBP or USD.
Despite May’s remarkable boost to fixed income, mixed-assets funds continue to dominate YTD flows, attracting £11.59bn. The main beneficiary at a more granular level is Mixed Asset GBP Aggressive – Global (+£8.54bn), indicating a tilt to equities that doesn’t extend to the asset class as such.
Equities remain the weakest asset class YTD (-£6.10bn), despite major indices climbing since the end of March. However, equity flows display a pronounced active-to-passive rotation, with active equity funds shedding £14.64bn and passive products attracting £8.54bn. Investors have favoured broad global exposure—Equity Global ex UK (+£4.17bn) and Equity Global (+£2.01bn)—while retreating from most country and regional exposures, even—or especially—where these have offered YTD outperformance, in the form of Asia Pacific ex Japan, and Japan.
Meanwhile, alternatives funds have seen a steady positive flows since last June, and have attracted £2.95bn YTD, likely driven by a search for strategies that offer some form of downside protection.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, May 2026 (£bn)
Source: LSEG Lipper
Net flows for May 2026 were £8.37bn, with passive strategies accounting for the bulk of demand (+£7.24bn), while active funds also returned a positive result (+£1.13bn). Excluding money market funds, flows were £7.08bn, again heavily tilted to passive vehicles (+£7.24bn), as active ex-MMF flows were marginally negative (-£155m).
Bonds were the clear winners, attracting £5.68bn, with passive bond funds taking £3.55bn and active funds also strongly positive (+£2.13bn). This marks a sizeable fixed income rebound and sits with the more supportive backdrop for duration in May, as yields eased over the month.
Equity funds, by contrast, saw net redemptions of £1.47bn, despite equities continuing to climb that wall of worry over the month. The underlying split was stark: active equity funds shed £5.03bn, while passive equity products attracted £3.57bn, reinforcing the persistent active-to-passive rotation.
Money market funds also saw inflows (+£1.29bn), almost entirely active (+£1.29bn), while alternatives attracted £803m, all active, continuing the recent pattern of positive demand. Mixed-assets funds were positive but modest (+£287m), almost entirely active. Commodity funds saw small inflows (+£25m), driven by passive products, while real estate remained negative (-£49m), all active. Overall, May’s flows were strongly positive, but the headline figure was dominated by passive bond and equity allocations.
Chart 3: Asset Class Flows, Active and Passive, YTD 2026 (£bn)
Source: LSEG Lipper
YTD flows to May 2026 were £13.44bn. With active funds being marginally negative (-£337m), it is passive strategies that have carried the year so far, attracting £13.77bn, underlining the continuing rotation away from active exposure, particularly in equity funds.
Mixed-assets funds remain the dominant YTD asset class, attracting £11.59bn, overwhelmingly through active strategies (+£11.03bn). This means mixed assets continue to provide the principal support for active flows, despite the broader negative active total. Bonds are the second-largest contributor, with inflows of £6.25bn, split between active (+£2.82bn) and passive (+£3.42bn), helped by May’s strong rebound.
In a restive market seeking asymmetric return sources, alternatives have also been a consistent source of demand, attracting £2.95bn YTD, entirely active.
By contrast, equities remain the major drag on overall flows, with YTD redemptions of £6.10bn. The active-to-passive rotation is particularly pronounced here: active equity funds have shed £14.64bn, while passive equity products have attracted £8.54bn.
Money market funds are also negative YTD (-£1.36bn), with active redemptions (-£2.21bn) partly offset by passive inflows (+£848m). This is largely down to the £3.52bn outflows in April.
Real estate remains persistently negative (-£330m), with the redemptions being from active strategies. Commodities (+£209m) and ‘other’ funds (+£225m) are modestly positive, both supported mainly by passive allocations.
ETFs and Passive Mutual Funds
Chart 4: Passive Asset Class Flows, Mutual Funds v ETFs, May 2026 (£bn)
Source: LSEG Lipper
Passive funds attracted £7.24bn over May, with mutual funds accounting for most demand (+£6.47bn), while ETFs added £768m.
Equity and bond products dominated passive flows, together accounting for £7.12bn of the monthly total. Passive equity funds attracted £3.57bn, driven entirely by mutual funds (+£3.59bn), as equity ETFs saw marginal redemptions (-£21m). Passive bond funds were similarly strong (+£3.55bn), though the vehicle split was more balanced. Mutual funds attracted £2.85bn, while bond ETFs added £704m, consistent with the supportive fixed income backdrop as yields eased during the month.
Elsewhere, passive mixed-assets funds attracted a modest £99m, all through mutual funds. Commodity flows were modestly positive (+£26m), driven by ETFs (+£34m), while passive money market products were flat overall (+£3m), with ETF inflows offsetting mutual fund redemptions.
Chart 5: Passive Asset Class Flows, Mutual Funds v ETFs, YTD 2026 (£bn)
Source: LSEG Lipper
Passive funds have attracted £13.77bn YTD, with mutual funds accounting for the larger share (+£9.33bn), while ETFs have added £4.45bn.
Despite net redemptions for the asset class in aggregate, equity has dominated passive demand, attracting £8.54bn, led by mutual funds (+£7.37bn), with ETFs also contributing a sizeable £1.17bn.
Bond flows have recovered strongly after earlier weakness and are now positive YTD (+£3.42bn). The underlying vehicle split is sharply divergent from the previous picture: bond ETFs have attracted £2.50bn, while passive bond mutual funds have added a further £925m.
Money market funds are also positive (+£848m), split between mutual funds (+£485m) and ETFs (+£363m). Mixed-assets passive flows stand at £562m, entirely through mutual funds, while ‘other’ funds have attracted £225m, all through ETFs. Commodity flows remain modest but positive (+£188m), overwhelmingly ETF-driven (+£193m), offsetting small mutual fund redemptions.
Alternatives are the only negative passive segment YTD (-£7m), with mutual fund outflows (-£9m) partly offset by marginal ETF inflows (+£2m).
Flows by Classification
Chart 6: Largest Positive and Negative Flows by LSEG Lipper Global Classification, May 2026 (£bn)
Source: LSEG Lipper
Bond Global USD saw the largest inflows in May (+£2.94bn), moving up from April’s third position, driven mainly by passive funds (+£2.55bn), although active strategies also contributed (+£391m). This was consistent with the broader rebound in fixed income demand as yields eased over the month. Bond Global GBP also attracted assets (+£787m), while Bond Global Corporates USD (+£567m) and Bond Global Corporates GBP (+£447m) were positive.
By contrast, Bond EMU Government (-£218m), Bond Global EUR (-£227m), and Bond GBP Corporates (-£374m) saw redemptions, highlighting a clear preference for global bond exposure over European and sterling corporate classifications, with investors likely shuffling their fixed-income exposure in expectation of an European Central Bank rate hike in June.
Equity Global ex UK was the second-largest money taker (+£1.47bn), entirely the result of passive inflows (+£1.86bn) offsetting active redemptions (-£390m). This uplift is driven by large inflows to a single fund developed world ex UK tracker the month (+£1.9bn), continuing the trend noted in April.
Interestingly, despite this, Equity UK enjoyed a rare break into positive territory (+£111m: -£215m active; +£326 passive), although this wasn’t share by Equity UK Small & Mid Cap (-£394m) and Equity UK Income (-£337m).
However, equity flows were otherwise broadly negative by geography: Equity Europe ex UK suffered the largest outflows (-£734m), followed by Equity US (-£560m). Unlike with Equity Global ex UK, these flows were quite diversified, indicating a broader-based negative sentiment, with these markets lagging over the month.
So far, UK investors haven’t been fully lured back to the US market by the siren-song of AI stocks, nor have they bought into Europe as the alternative. “Fully”, as the second-most popular equity classification is Equity Sector Information Technology (+£275m), just outside the table. So, while UK investors seem somewhat skittish about the US mega cap/AI story, this sentiment isn’t common to all. After that, it’s Equity Theme – Infrastructure at sixteenth place, with net flows of £233m for the month.
In contrast, despite Asia Pacific ex Japan leading equity index returns over May, Equity Asia Pacific ex Japan once again suffered redemptions (-£434m), as did and Equity Japan (-£220m). Unusually, given that it’s been strongly in favour with UK investors over the past year, Equity Emerging Markets Global also suffered redemptions (-£383m). But, with the Asian Development Bank reporting that 15 countries were seeking emergency loans, this isn’t that surprising.
It’s notable that Loan Participation Funds made it into the top ten flows (+£407m): something of a rare occasion for a relatively niche category. This was driven by allocations to two share classes (EUR and GBP) of an active ETF investing in AAA-rated CLOs.
Mixed-assets classifications remained positive, led by Mixed Asset GBP Flexible (+£968m) and Mixed Asset GBP Aggressive – Global (+£806m), almost entirely active. Money Market GBP also attracted £1.24bn, overwhelmingly through active funds.
Chart 7: Largest Positive and Negative Flows by LSEG Lipper Global Classification, YTD 2026 (£bn)
Source: LSEG Lipper
The top-two ranks in YTD flows are unchanged from April. Mixed Asset GBP Aggressive – Global remains the dominant YTD classification, attracting £8.54bn, almost entirely through active funds (+£8.53bn). Mixed Asset GBP Flexible has also been strongly positive (+£2.10bn), reinforcing the central role of mixed-assets allocations in supporting overall active flows.
Equity flows remain sharply divided. Equity Global ex UK has attracted £4.17bn YTD (+£2.32bn active; +£1.86bn passive, each dominated by one fund management company), while Equity Global is also positive (+£2.01bn).
Equity Emerging Markets Global has taken £1.93bn, almost all active, but has slid down the rankings as a result of May’s redemptions—likely due to concerns over the impact of energy costs, as many Ems are more exposed to this.
However, other regional equity classifications remain under sustained pressure: Equity Europe ex UK has suffered the largest YTD redemptions (-£2.71bn), as European equities lag the global index YTD, as have UK equities, with Equity UK (-£2.40bn), Equity UK Small & Mid Cap (-£1.63bn), and Equity UK Income (-£1.76bn) seeing continuing redemptions.
Equity Asia Pacific ex Japan (-£2.21bn), and Equity Japan (-£1.14bn) also continue to suffer outflows, despite YTD outperformance. Investors have preferred to get their “ex global north” equity exposure from EMs, although this too suffered in May. This suggests investors continue to favour broad global exposure while trimming more regional or domestic allocations.
Within bonds, Bond Global USD has attracted £2.69bn, mainly passive (+£2.55bn), while Bond GBP Government has taken £2.05bn, mainly active (+£1.97bn). Bond Global Corporates USD is also positive (+£1.54bn). By contrast, Bond GBP Corporates remains a major drag (-£2.16bn), almost entirely active. Sector flows were also negative, with Equity Sector Gold & Precious Metals shedding £640m, as investors continue to exit as the latest gold rush lost its lustre.
Flows by Promoter
Chart 8: Largest Positive Flows by Promoter, May 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted £11.59bn in May, with HSBC leading sales by a clear margin (+£3.06bn). Its flows were dominated by money market funds (+£1.46bn) and bonds (+£1.12bn), with additional support from alternatives (+£228m), mixed assets (+£161m), and equities (+£92m).
Vanguard ranked second (+£2.11bn), with flows split mainly between equities (+£1.21bn) and bonds (+£709m), alongside smaller mixed-assets (+£107m) and money market (+£83m) allocations. BlackRock followed (+£1.51bn), despite sizeable money market redemptions (-£949m), as equity inflows (+£1.50bn—the largest of any firm over the month) and bond allocations (+£732m) more than offset the drag.
Invesco attracted £1.51bn, led by bonds (+£662m) and equities (+£632m), while JPMorgan took £1.22bn, driven overwhelmingly by money market inflows (+£1.16bn). Royal London’s £631m inflow was supported by money market funds (+£1.65bn), offset by large equity redemptions (-£1.02bn). LGT Group attracted the largest mixed asset flows (+£558m).
Chart 9: Largest Positive Flows by Promoter, YTD 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted £28.72bn YTD, with the first four rankings unchanged from April.
Vanguard leads (+£8.88bn), with flows dominated by equities (+£6.03bn), and further supported by bonds (+£1.84bn), mixed assets (+£684m), and money market funds (+£326m).
HSBC ranked second (+£6.36bn), with bond flows the main driver (+£3.79bn), alongside money market funds (+£899m), mixed assets (+£777m), equities (+£651m), and alternatives (+£240m). Amundi followed (+£3.24bn), led by equities (+£1.69bn), money market funds (+£821m), and bonds (+£757m).
Schroders remains prominent YTD (+£2.65bn), with its position the result of mixed-assets inflows (+£5.07bn), partly offset by bond (-£1.21bn), money market (-£661m), equity (-£411m), and alternatives (-£138m) redemptions. JPMorgan (+£2.12bn) has benefited mainly from money market and bond inflows (+£1.83bn and £727m respectively), while Northern Trust (+£2.09bn) has been led by bonds (+£1.25bn).
