Bonds and Mixed Assets Drive Strong Q2 2026 Flows
Asset class
- Net flows were £5.78bn in June, (+£5.31bn excluding MMFs), taking YTD flows to £19.04bn
- From July 2025 to June 2026, mixed-assets funds have gathered £22.75bn, more than any other asset class
Active v passive
- Net flows for June were driven by passive strategies (active, -£18m/passive, +£5.80bn).
- Bond products overtook equities to be the largest source of passive inflows for the month (+£3.44bn)
Classifications
- Bond Global USD saw the largest inflows (+£2.96bn), while Bond Global GBP was also strongly positive (+£1.73bn)
- Equity Europe ex UK saw the largest redemptions overall (-£2.71bn)
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to June 2026 (£bn)
Source: LSEG Lipper
Net flows were £5.78bn in June, or £5.31bn excluding MMFs, taking YTD flows to £19.04bn and £20.02bn ex-MMFs. This was therefore another strong month, but not an exceptional one in the 36-month context: the more important point is that it completed a positive Q2 after a mixed first quarter.
Bonds were the main driver. The asset class attracted £3.82bn in June, following £2.52bn in April and £5.69bn in May, taking Q2 bond inflows to £12.02bn. That is the strongest three-month period for bonds in chart 1, ahead of the previous peak of £10.58bn in Q4 2024. The £10.05bn YTD bond inflow is overwhelmingly a Q2 story, as the asset class was still negative after March. This has been supported by a macro backdrop of easing yields and positive sovereign bond returns over Q2.
Mixed-assets funds remain the most consistent success story. From July 2025 to June 2026, mixed-assets funds have gathered £22.75bn, more than bonds over the same period (+£17.21bn), and well ahead of alternatives (+£7.52bn). That makes mixed assets the most successful asset class over the past 12 months, despite the sharp June 2025 outflow immediately before this run began.
Alternatives also deserve emphasis. June’s £1.63bn inflow is the highest monthly alternatives inflows over the 36-month period, comfortably above the previous high of £903m in March 2026. The asset class has now posted positive flows in every month since June 2025, taking £7.53bn over that 13-month run and £4.58bn YTD. What had looked like a steady background allocation has become more material, as investors look for strategies that offer downside protection in richly valued and volatile markets.
Equities remain the clear countertrend—in contrast to what we see in Europe overall. June redemptions of £2.69bn took YTD outflows to £8.84bn, despite a more constructive Q2 market backdrop in which Asia Pacific ex Japan, Japan, and US small and mid-caps performed strongly, while UK equities lagged. Across the 36-month period, equity funds have suffered redemptions in 23 of the 36 months, with cumulative outflows of £42.87bn. The weakness has become more concentrated since July 2025: over the past 12 months, equities have seen only three positive months and have shed £38.62bn. June therefore looks less like an isolated risk-off reaction and more like a continuation of a persistent pattern in which UK investors have favoured bonds, mixed assets, and alternatives over direct equity exposure.
Active versus Passive
Chart 2: Asset Class Flows, Active and Passive, June 2026 (£bn)
Source: LSEG Lipper
Net flows for June 2026 were £5.78bn, driven almost entirely by passive strategies (active, -£18m/passive, +£5.80bn). Excluding money market funds, flows were £5.31bn, with active funds seeing redemptions of £656m, while passive funds attracted £5.97bn.
Rankings were broadly in line with May, albeit with Alternatives moving up a place on the previous month. Bond funds led the month, taking £3.82bn, with most of the money going to passive products (+£3.44bn), although active bond funds also attracted £378m. Mixed-assets funds followed, gathering £2.75bn, almost entirely through active strategies (+£2.65bn), continuing their role as the main support for active demand.
Alternatives also saw strong inflows of £1.63bn, again overwhelmingly active (+£1.63bn). Money market funds added £468m, but with a split between active inflows of £638m and passive redemptions of £170m.
Equities remained the principal drag, with net outflows of £2.69bn. The active-to-passive rotation was stark: active equity funds shed £5.13bn, while passive equity products attracted £2.44bn. Real estate (-£198m) and ‘other’ funds (-£109m) also remained negative.
Chart 3: Asset Class Flows, Active and Passive, YTD 2026 (£bn)
Source: LSEG Lipper
Flows for the first half of 2026 were £19.57bn, dominated by passive strategies (active, -£346m/passive, +£19.92bn). Excluding money market funds, flows were slightly stronger at £20.43bn, with active funds also positive (£1.19bn) but still well behind passive demand (£19.24bn).
Mixed-assets funds remained the dominant asset class YTD, attracting £14.26bn, overwhelmingly through active strategies (+£13.58bn).
Bond funds were the next-largest contributor, taking £10.38bn, with demand split between passive (+£7.17bn) and active strategies (+£3.20bn). Bond markets have benefited from declining yields and expectations that major central banks would move toward easier monetary policy, and this will likely have encouraged flows into the asset class in Q2. Alternatives were also firmly positive (+£4.58bn), almost entirely active, continuing their strengthening run over recent months.
As has consistently been the case month-on-month, equities were deepest in the red (again, in contrast to Europe: see chart 2 here), with net redemptions of £8.70bn. However, this masks a sharp active-to-passive rotation, as the former shed £19.70bn, while passive equity products attracted £11bn.
MMF were negative YTD (-£858m), with active redemptions partly offset by passive inflows.
Real estate also remained under pressure (-£515m), while commodities (+£315m) and ‘other’ funds (+£116m) made modest positive contributions.
ETFs and Passive Mutual Funds
Chart 4: Passive Asset Class Flows, Mutual Funds v ETFs, June 2026 (£bn)
Source: LSEG Lipper
Passive funds attracted £5.80bn in June, and as is generally the case in the UK market, mutual funds accounted for nearly all demand (+£5.56bn), while ETFs added a comparatively modest £236m.
Bond products overtook equities to be the largest source of passive inflows for the month (+£3.44bn). This was led by mutual funds (+£2.84bn), with ETFs contributing a further £601m.
June’s passive equity demand was entirely a mutual fund story. Equity passive flows were also strongly positive (+£2.44bn), as mutual funds gathered £2.85bn, while their ETFs peers saw redemptions of £406m.
Other passive asset classes come far behind: passive mixed-assets funds took £106m, all through mutual funds. Commodity products attracted £93m, split between mutual funds (+£55m) and ETFs (+£38m), while alternatives were essentially flat at £1m.
Money market passive funds saw redemptions of £170m, as mutual fund outflows of £280m outweighed ETF inflows of £110m. ‘Other’ passive funds also detracted, with ETF redemptions of £109m.
Chart 5: Passive Asset Class Flows, Mutual Funds v ETFs, YTD 2026 (£bn)
Source: LSEG Lipper
Passive flows for H1 2026 reached £19.92bn, with the rankings unchanged since the previous month. The split also shows mutual funds doing more of the heavy lifting than ETFs (mutual funds: +£15.22bn/ETFs: +£4.69bn). Equity has been the dominant passive allocation so far, taking £11bn, despite the net outflows for the asset class overall. Most of that came through mutual funds (+£10.24bn), although ETFs also added £763m. This is in marked contrast to the rest of Europe, where ETFs are by far the favoured vehicle for passive equity allocation.
Bonds rank second at £7.17bn, but the vehicle mix is less one-sided: mutual funds gathered £4.07bn, while ETFs brought in £3.11bn. This makes fixed income the main area where ETF demand has been close to matching mutual fund allocations.
Passive mixed-assets funds added £674m, all through mutual funds, while commodity products took £278m, mostly ETFs (+£230m), with mutual funds adding £48m. Money market passive funds have also been positive YTD (£679m), led by ETFs (+£474m), alongside £205m from mutual funds. The ‘other’ category contributed £116m, entirely through ETFs. Alternatives are the only passive segment in negative territory: a wafer-thin -£6m.
Flows by Classification
Chart 6: Largest Positive and Negative Flows by LSEG Lipper Global Classification, June 2026 (£bn)
Source: LSEG Lipper
Bond classifications led the positive side of the June table, with Bond Global USD attracting the largest inflows (+£2.96bn), overwhelmingly through passive vehicles (+£2.47bn).
Bond Global GBP was also strongly positive (+£1.73bn), with flows evenly split between active (+£899m) and passive (+£834m). However, fixed income demand was selective: Bond Global EUR (-£520m), Bond GBP Corporates (-£226m), and Bond Global High Yield USD (-£739m) all suffered redemptions, as investors favoured global sterling and dollar aggregate exposure over credit and euro bond classifications.
Equities were sharply polarised. Equity Global ex UK was the second-largest money taker overall (+£2.03bn), driven entirely by passive inflows (+£2.30bn). Indeed, almost £2bn was to a single share class: the Vanguard FTSE Developed World ex-UK Equity Index GBP Acc. That stands in marked contrast to Equity Global, which saw the largest outflows (-£1.36bn), with heavy active redemptions (-£2.00bn) slightly offset by passive demand (+£640m). Asian markets also suffered: Equity Asia Pacific ex Japan
(-£853m) and Equity Japan (-£250m) saw redemptions, despite good performance over the year. Equity Europe ex UK also saw ongoing redemptions (-£658m).
UK weakness was broad, with both large-cap and small/mid-cap classifications seeing active and passive outflows: Equity UK
(-£690m), Equity UK Small & Mid Cap (-£394m). The FTSE 250 and FTSE 100 underperformed over Q2, although UK equities are consistently sold off by UK investors, seemingly irrespective of performance. Equity US Small & Mid Cap (-£220m) was also negative, despite strong YTD performance.
Mixed-assets classifications remained firmly in favour, led by Mixed Asset GBP Aggressive – Global (+£1.04bn) and Mixed Asset GBP Conservative – Global (+£1.02bn), almost entirely active. Mixed Asset GBP Flexible added £534m.
Alternatives saw their strongest month for at least three years, with Alternative Multi Strategies taking £799m and Alternative Credit Focus £456m.
Chart 7: Largest Positive and Negative Flows by LSEG Lipper Global Classification, YTD 2026 (£bn)
Source: LSEG Lipper
The top five ranks YTD flows are unchanged from May. Mixed-assets classifications continue to dominate YTD flows, with Mixed Asset GBP Aggressive – Global the clear leader, attracting £8.54bn, almost entirely through active funds (+£8.53bn). Mixed Asset GBP Flexible followed with £2.10bn, while Mixed Asset GBP Balanced – Global added £1.47bn, again overwhelmingly active. Indeed, mixed asset funds remain the clearest support for active fund flows in 2026.
Broad global classifications have attracted strong inflows: Equity Global ex UK took £4.17bn, split between active (+£2.32bn) and passive (+£1.86bn), while Equity Global added £2.01bn, mainly passive (+£1.28bn). Equity Emerging Markets Global was also positive (+£1.93bn), almost entirely active. The latter are likely supported by investors’ focus on EM firms supplying much in-demand hardware—not least chips—that are crucial to building out AI capacity, as hardware index performance has raced ahead of software over the year.
However, those markets seen as more peripheral to this AI theme remain unloved. As was the case last month, Equity Europe ex UK saw the largest redemptions overall (-£2.71bn), followed by Equity UK (-£2.40bn), Equity Asia Pacific ex Japan (-£2.21bn), Equity UK Small & Mid Cap (-£1.83bn), Equity UK Income (-£1.76bn), and Equity Japan (-£1.14bn). This is something of a curate’s egg, as while the UK has certainly lagged over the year, Asia Pacific ex Japan was the strongest-performing major regional equity market during Q2 2026, followed by US small caps (the Russell 2000), Japan and the Eurozone, according to FTSE Russell analysis.
Bond Global USD attracted £2.69bn, almost entirely passive (+£2.55bn), while Bond GBP Government took £2.05bn, mainly active (+£1.97bn). Bond Global Corporates USD added £1.54bn. However, Bond GBP Corporates remained a major drag (-£2.16bn), with redemptions largely active (-£2.07bn).
Money Market GBP also saw YTD outflows (-£2.22bn), which may be affected by the Bank of England holding rates steady, possibly tempting investors into the perceived safer areas of the fixed income in search of a little more yield.
Flows: Institutional v Retail
Chart 8: Asset Class Flows, Institutional and Retail, June 2026 (£bn)
Source: LSEG Lipper
The clearest bifurcation between retail and institutional appetite in June was in equities: institutional investors added while retail investors continued to sell. Institutional equity funds attracted £973m, as the retail market divested itself of equities (-£3.67bn)..
Retail investors providing the bulk of demand for bond funds (+£3.07bn), compared with £746m from institutional investors.
Mixed-assets flows are generally heavily retail-led, so the large flows of this cohort (+£2.77bn), with institutions marginally negative (-£17m), are no surprise. That is consistent with the role mixed-assets funds play in retail portfolios, where they are often used as core diversified holdings.
Institutional demand was strongest outside traditional retail allocations. Alternatives attracted £1.13bn from institutions, versus £503m from retail investors: again, unsurprising, given that institutional investors have greater experience with, and knowledge of, such non-vanilla strategies, and often greater access.
Money market funds saw institutional inflows of £949m against retail redemptions of -£481m. Real estate was negative for both, led by institutional outflows.
Chart 9: Asset Class Flows, Institutional v Retail, YTD 2026 (£bn)
Source: LSEG Lipper
The YTD picture reinforces June’s differentiation between institutional and retail equity appetite. Institutional equity funds have attracted £1.54bn, while the retail market has dumped the asset class (-£10.24bn). As with the monthly figures, this means the headline equity outflow masks sharply different behaviour by investor type.
While mixed-assets flows are again strongly retail-led, with retail investors allocating £10.35bn, compared with £3.91bn from institutions, the difference is considerably less pronounced than with the monthly figures.
Bond demand has been more balanced, though still retail-led: retail investors added £6.91bn, while institutions contributed £3.46bn.
Alternatives show the opposite pattern. Institutional investors allocated £3.14bn, more than double the £1.45bn from retail investors, unsurprising given institutional familiarity with non-vanilla strategies and often better access. Money market funds were negative for both retail (-£716m) and institutional (-£142m), while real estate also saw redemptions from both cohorts.
Flows by Promoter
Chart 10: Largest Positive Flows by Promoter, June 2026 (£bn)
Source: LSEG Lipper
The top 10 promoters attracted £11.92bn in June—more than double the total net flows for the month. Legal & General led by some distance, taking £3.73bn. Its flows were dominated by money market funds (+£2.52bn) and mixed assets (+£1.04bn), with smaller equity inflows (+£350m) partly offset by bond and real estate redemptions.
Vanguard ranked second, attracting £2.37bn, led by equities (+£1.62bn) and bonds (+£537m), continuing its role as a major beneficiary of passive allocation. HSBC followed with £2.19bn, with flows spread across equities (+£882m), bonds (+£815m), money market funds (+£347m), and mixed assets (+£153m).
T. Rowe Price took £854m, entirely through equity funds (+£883m), while wealth manager Fairstone’s £568m was mainly mixed assets (+£456m). Invesco and Quilter each attracted £529m, both bond-led. Federated Hermes’ £362m inflow was driven by money market funds (+£579m), despite equity redemptions (-£215m).
Chart 11: Largest Positive Flows by Promoter, YTD 2026 (£bn)
Source: LSEG Lipper
The top 10 promoters attracted £37.63bn YTD, equivalent to 192.3% of total industry net flows, indicating that inflows remain highly concentrated among a small group and offset by redemptions elsewhere.
Vanguard leads, taking £11.26bn, driven mainly by equity funds (+£7.66bn), with bonds (+£2.38bn), mixed assets (+£853m), and money market funds (+£368m) also contributing. HSBC ranks second with £8.52bn, led by bonds (+£4.59bn), equities (+£1.53bn), money market funds (+£1.25bn), and mixed assets (+£924m).
Amundi follows on £3.55bn, with flows dominated by equities (+£1.72bn), bonds (+£1.20bn), and money market funds (+£640m). Schroders’ £2.83bn is almost entirely the result of mixed-assets inflows (+£5.19bn), partly offset by bond (-£1.22bn), money market (-£571m), and equity redemptions (-£391m).
