Equity Global Funds Continue Sell-Off, With Investors Favouring US Equity Exposure
Asset class
- Net flows for August were -£1.86bn; excluding money market funds, flows were +£2.41bn
- Real estate was the strongest-selling asset class (+£2.09bn), while equities (-£2.04bn) and money market funds
(-£4.26bn) suffered the largest redemptions
Active v passive
- Monthly flows were £4.23bn active redemptions, versus £2.38bn passive inflows
- Despite large redemptions for the asset class overall, equities led passive flows in August (+£1.4bn), recovering from July’s net redemptions
Classifications
- Equity US crept up the rankings, attracting £1.25bn, while Equity Emerging Markets Global took £509m
- Money Market GBP suffered the heaviest redemptions (-£4.37bn), followed by Equity UK (-£1.70bn) and Equity Global (-£1.36bn)
Flows by Asset Class
Three-Year Flows
Chart 1: Asset Class Flows, 36 Months, to August 2026 (£bn)
Source: LSEG Lipper
August saw net redemptions of £1.86bn, but the headline number was dominated by money market outflows (-£4.26bn). Excluding MMFs, the month was positive (+£2.41bn), with real estate, bonds, and mixed-assets funds all attracting significant inflows.
Equities remained the principal weak spot, suffering redemptions of £2.04bn in August. This is despite global equities advancing over the month, supported by resilient economic activity and strong corporate earnings. The asset class has only had two positive months this year—February and April—both rather muted. The disconnect between market performance and investor demand remains pronounced: equity funds have now lost £21bn YTD, making them by far the weakest asset class in 2026.
Bonds, by contrast, attracted £1.14bn in August, taking YTD inflows to £17.82bn—the strongest asset class total so far this year, with only January and March being in the red. That resilience is notable given that government bond yields continued to rise during August, with longer-duration sovereign bonds generally underperforming and UK gilt yields reaching levels last seen in 2008.
Mixed-assets funds also remained in favour (+£917m), taking YTD inflows to £11.95bn, while alternatives added £244m and have now attracted £5.24bn YTD, making them the third most popular asset class as investors seek strategies offering forms of downside protection.
Money market funds’ £4.26bn of redemptions is the largest for the asset class since last June.
Asset Class
Chart 2: Asset Class Flows, Active and Passive, August 2026 (£bn)
Source: LSEG Lipper
Net flows for August 2026 were (-£1.86bn), as active fund redemptions (-£4.23bn) more than offset passive inflows (+£2.38bn). Excluding money market funds, however, the picture was considerably stronger, with net inflows of £2.41bn (active, +£143m/passive, +£2.27bn).
There is something of a caveat that needs to be made here. Real estate was the strongest-selling asset class, attracting £2.09bn, entirely through active funds. This is the result of a single share class allocation. Lipper is currently verifying whether this is true new money, or an internal transfer. If it’s the latter, that is quite a significant shift, given the parlous state of the UK real estate fund market, and it would be fascinating to know who is spending big here. But, for obvious reasons, the smart money would favour an internal movement.
Bonds followed, with inflows of £1.14bn, tilted towards passive strategies (active, +£432m/passive, +£712m), while mixed-assets funds took £917m, predominantly active. Alternatives also remained positive (+£244m), again overwhelmingly active (+£230m).
Despite a strong rebound in global equities at the start of August, and a broadening of the rally, the asset class saw net redemptions of £2.04bn. But this masked—as is so often the case—a pronounced active-to-passive rotation: active equity funds shed £3.43bn, while passive products attracted £1.40bn. Money market funds saw the strongest inflows in July, but this month saw the heaviest redemptions (-£4.26bn), driven almost entirely by active funds (-£4.38bn).
Commodity funds saw modest inflows (+£51m), mainly passive (+£40m), while ‘other’ funds recorded marginal redemptions (-£5m). Overall, August’s headline outflow was driven by active money market and equity redemptions, while passive strategies remained firmly positive.
Chart 3: Asset Class Flows, Active and Passive, YTD 2026 (£bn)
Source: LSEG Lipper
YTD flows were £16.60bn, with passive strategies accounting for all and more of the net demand (+£23.32bn), while active funds suffered redemptions (-£6.72bn). The divergence is particularly pronounced in equities, where heavy active outflows have more than offset substantial passive inflows.
Bonds are the strongest asset class YTD (+£17.82bn), with demand heavily skewed towards passive strategies (+£12.28bn), although active funds have also taken £5.55bn. Mixed-assets funds follow with £11.95bn, overwhelmingly through active strategies (+£11.23bn/passive, +£721m).
Alternatives have also been a major source of active demand, attracting £5.24bn YTD, almost entirely active (+£5.23bn). Real estate is likewise positive (+£1.52bn), although note that this is entirely a result of August’s £2bn-plus allocation (see chart 2).
Equities remain the clear drag on the overall total, suffering YTD redemptions of £21bn. Beneath this is an exceptionally strong active-to-passive rotation: active equity funds have shed £29.88bn, while passive products have attracted £8.88bn, as investors are likely driven by concerns of liquidity and cost in this market.
Money market funds are modestly positive (+£608m), as passive inflows (+£1.04bn) offset active redemptions (-£434m), indicating that the monthly volatility in inflows and outflows has broadly evened out over the year so far.
Meanwhile, commodities have attracted £398m, mainly passive (+£332m), while ‘other’ funds are marginally positive (+£59m).
ETFs and Passive Mutual Funds
Chart 4: Passive Asset Class Flows, Mutual Funds v ETFs, August 2026 (£bn)
Source: LSEG Lipper
Passive funds attracted £2.38bn in August, with mutual funds accounting for the majority of demand (+£1.69bn), while ETFs added £685m.
Equities dominated passive flows (+£1.40bn), recovering from July’s net redemptions. Inflows were overwhelmingly through mutual funds (+£1.31bn), with ETFs contributing a relatively modest £83m. Bonds followed (+£712m), considerably down on the previous month’s £3bn-plus. Here, the vehicle split was reversed: ETFs accounted for most of the inflows (+£525m), compared with £187m for passive mutual funds.
Elsewhere, passive money market funds attracted £112m, fairly evenly split between mutual funds (+£59m) and ETFs (+£53m), while mixed-assets funds took £108m, entirely through mutual funds. Commodities attracted £40m, mainly through ETFs (+£32m). Alternatives recorded modest inflows of £14m, as mutual fund demand (+£17m) offset small ETF redemptions (-£3m), while ‘other’ passive funds saw marginal outflows (-£5m), entirely from ETFs.
Chart 5: Passive Asset Class Flows, Mutual Funds v ETFs, YTD 2026 (£bn)
Source: LSEG Lipper
Passive funds have attracted £23.32bn YTD, with mutual funds accounting for the larger share (+£16.93bn), while ETFs have added £6.39bn.
Bonds are the largest source of passive demand, attracting £12.28bn, with inflows split between mutual funds (+£7.46bn) and ETFs (+£4.82bn). Equities follow with £8.88bn of inflows, although here the vehicle split is much more heavily tilted towards mutual funds (+£8.25bn), with ETFs contributing a comparatively modest £626m.
Money market funds have attracted £1.04bn YTD, with ETFs (+£615m) ahead of mutual funds (+£427m). Passive mixed-assets flows stand at £721m, entirely through mutual funds, while commodities have gathered £332m, predominantly through ETFs (+£263m). ‘Other’ funds have attracted £60m, all through ETFs, while alternatives remain a very small positive contributor (+£13m).
Flows by Classification
Chart 6: Largest Positive and Negative Flows by LSEG Lipper Global Classification, August 2026 (£bn)
Source: LSEG Lipper
Real Estate UK was the largest money taker in August, attracting £2.11bn, all and more to one share class. That looks questionable, and may be an internal shift by the asset manager. If it’s not, this is a very significant allocation, but until confirmed, we remain sceptical.
Equity flows were sharply divided by geography. Equity US crept up the rankings, attracting £1.25bn (+£807m active/+£445m passive), while Equity Emerging Markets Global took £509m, with the majority going to passive vehicles (+£352m). Equity Europe was also positive, albeit more modestly (+£153m). By contrast, UK equity classifications remained under significant pressure: Equity UK suffered redemptions of £1.70bn, Equity UK Income shed £866m and Equity UK Small & Mid Cap lost £305m. This is despite the FTSE 250 leading major regional equity indices, highlighting the continuing disconnect between relative UK market performance and investor demand.
As was the case in July, Equity Global also saw heavy redemptions (-£1.36bn), although this concealed a pronounced active-to-passive rotation: active funds shed £1.97bn while passive products attracted £611m. The contrast with Equity US suggests investors continued to favour more targeted US exposure over global allocations during the month.
Bond flows similarly show a preference for global over sterling exposures. Bond Global USD attracted £378m, while Bond Global Short Term (+£247m), Bond Other (+£238m), and Bond Emerging Markets Global HC (+£199m) were also positive. Sterling bond classifications were weaker: Bond GBP Corporates (-£276m), Bond GBP Government (-£90m), and Bond GBP Short Term (-£89m). Bond Global GBP also recorded net outflows (-£82m) despite active inflows of £153m, as passive funds shed £235m. This tilt towards shorter-duration and global exposures came as government bond yields continued to rise during August and longer-duration sovereign debt underperformed.
Elsewhere, Mixed Asset GBP Aggressive – Global attracted £668m, while Alternative Credit Focus took £129m. The largest redemptions overall came from Money Market GBP (-£4.37bn), almost wholly from active funds (-£4.38bn).
Chart 7: Largest Positive and Negative Flows by LSEG Lipper Global Classification, YTD 2026 (£bn)
Source: LSEG Lipper
Mixed-assets classifications loom large on the positive side of the YTD table. Mixed Asset GBP Aggressive – Global leads, attracting £7.97bn, leapfrogging Bond Global USD—the YTD leader in July. Mixed Asset GBP Flexible has taken £3.23bn and Mixed Asset GBP Conservative – Global £3.14bn, again overwhelmingly active. The exception is Mixed Asset GBP Balanced – Global, which has suffered redemptions of £1.80bn, also principally from active funds (-£1.82bn).
Equity flows remain sharply divided. Equity Global ex UK has attracted £5.89bn YTD, although £7bn has gone into one tracker fund. Further, Equity US has taken £3.29bn and Equity Emerging Markets Global £2.92bn. By contrast, Equity Global has suffered the largest equity redemptions (-£6.80bn) despite passive inflows (+£611m), as active funds shed £7.41bn.
The weakness across UK and regional equity classifications is broad. Equity UK has lost £5.76bn YTD, followed by Equity Europe ex UK (-£5.30bn), Equity UK Income (-£3.36bn), Equity Asia Pacific ex Japan (-£3.06bn), Equity UK Small & Mid Cap (-£2.89bn), and Equity Japan (-£2.75bn). In almost every case, the outflows are overwhelmingly from active strategies, reinforcing the pressure on actively managed regional equity funds.
Bond flows are more constructive overall. Bond Global USD has attracted £6.57bn, almost entirely active (+£6.26bn), while Bond Global GBP has taken £2.97bn and Bond GBP Government £2.85bn. Bond Global Corporates USD is also positive (+£1.96bn). Against that, Bond GBP Corporates has suffered redemptions of £2.24bn, almost all active (-£2.25bn).
Elsewhere, Absolute Return GBP Low has seen YTD outflows of £1.26bn, entirely from active funds.
Institutional v Retail
Chart 8: Asset Class Flows, Institutional and Retail, August 2026 (£bn)
Source: LSEG Lipper
August’s institutional versus retail data looks—not to put too finer point on it—weird. As a reminder, net aggregate flows for the month are (-£1.86bn). Something of an indifferent month. But net institutional inflows are £66.64bn, and retail outflows £68.5bn. The reason for this seems to be that one large asset manager (hint: very large) has been doing some housekeeping, with transfers from retail share classes to institutional ones, hence the large swings, especially in equities and bonds. What this almost certainly is not is retail investors cashing out as institutions pile in.
The effect is most apparent in equities, where retail funds saw outflows of £49.52bn while institutional funds attracted £47.49bn, leaving the asset class with much more modest net redemptions of £2.04bn. Bonds show the same pattern in the opposite direction: retail redemptions (-£17.79bn) were offset by institutional inflows (+£18.93bn), producing net bond inflows of £1.14bn.
Away from these internal movements, real estate recorded the strongest net inflows in August (+£2.09bn), driven by institutional allocations (+£2.14bn). Mixed-assets funds also attracted assets (+£917m), as institutional inflows (+£2.11bn) outweighed retail redemptions (-£1.19bn). Alternatives added £244m, mainly from retail investors.
Money market funds suffered the largest underlying redemptions (-£4.26bn), overwhelmingly from institutional investors (-£4.11bn). Commodities saw modest inflows (+£51m), while ‘other’ funds were broadly flat (-£5m).
Chart 9: Asset Class Flows, Institutional v Retail, YTD 2026 (£bn)
Source: LSEG Lipper
Net flows were £16.60bn, but this masks a divergence between investor types, skewed by the (likely) August house-cleaning by one specific asset manager (see chart 8): institutional funds attracted £82.35bn, while retail funds suffered redemptions of £65.74bn.
The contrast was most pronounced in equities. Retail equity funds shed £66.04bn, while institutional investors allocated £45.04bn, leaving the asset class with net redemptions of £21.00bn. Bonds showed the opposite outcome at the headline level: institutional inflows of £24.96bn more than offset retail redemptions (-£7.14bn), producing net inflows of £17.82bn.
Mixed-assets funds were also strongly positive (+£11.95bn), with demand coming from both institutional (+£7.04bn) and retail investors (+£4.92bn). Alternatives attracted £5.24bn, again with positive contributions from both channels (+£3.18bn institutional/+£2.06bn retail).
Real estate saw a clear retail-to-institutional split, with institutional inflows of £1.82bn offsetting retail redemptions (-£300m) to leave the asset class £1.52bn positive. Money market funds (+£608m) and commodities (+£398m) also attracted modest inflows from both investor groups, while ‘other’ funds were broadly flat (+£59m).
Flows by Promoter
Chart 10: Largest Positive Flows by Promoter, August 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted £7.32bn in August, with Halifax leading by a clear margin (+£2.08bn—although see caveats under charts 2 and 6). Its position was almost entirely the result of real estate inflows (+£2.12bn), offset by modest redemptions from bonds, equities, and mixed assets.
BlackRock ranked second, attracting £1.67bn, with flows led by bonds (+£1.09bn) and equities (+£461m), alongside £104m to mixed-assets funds. WisdomTree followed with £764m, almost entirely from commodities (+£749m), while Vanguard attracted £750m, led by equities (+£421m) and bonds (+£253m).
Amundi took £690m, with equities accounting for the largest share (+£509m), supplemented by money market funds (+£100m) and bonds (+£78m). Dimensional (+£381m), Artemis (+£283m), Capital Group (+£221m), and UBS Asset Management (+£212m) also recorded positive flows, generally led by bond and equity allocations.
Royal London attracted £263m overall, but the underlying picture was more mixed: strong money market inflows (+£747m) and bond demand (+£108m) were partly offset by equity (-£514m) and mixed-assets (-£78m) redemptions.
Chart 11: Largest Positive Flows by Promoter, YTD 2026 (£bn)
Source: LSEG Lipper
The top 10 fund promoters attracted £45.58bn YTD, equivalent to 274.6% of total net industry flows. That concentration reflects sizeable inflows to the leading firms being offset by redemptions elsewhere in the market.
Vanguard leads by a wide margin, attracting £13.43bn. Equity funds account for the bulk of this (+£9.02bn), supported by bonds (+£2.93bn), mixed assets (+£1.06bn), and money market funds (+£428m). HSBC ranks second with £10.50bn, led by bonds (+£5.26bn) and money market funds (+£2.60bn), alongside mixed-assets (+£1.18bn) and equity (+£1.22bn) inflows.
Amundi follows with £4.62bn, driven mainly by equities (+£2.40bn) and bonds (+£1.24bn), while Schroders has attracted £4.07bn. The latter is overwhelmingly the result of mixed-assets inflows (+£5.78bn), which more than offset bond (-£1.16bn), money market (-£728m), and alternatives (-£201m) redemptions.
Legal & General has taken £2.62bn, with mixed assets (+£2.22bn) and money market funds (+£909m) offsetting commodity (-£607m) and equity (-£375m) outflows. JPMorgan’s £2.46bn total is similarly concentrated, with money market inflows (+£3.12bn) and alternatives (+£527m) more than compensating for substantial equity redemptions (-£1.45bn).
Dimensional (+£2.02bn), Coutts (+£2.02bn), Invesco (+£1.99bn), and Titan Wealth (+£1.86bn) complete the top 10. Dimensional and Invesco have been led by bond demand, while Coutts’ position is dominated by mixed assets (+£1.92bn) and Titan Wealth’s by equities (+£983m) and bonds (+£595m).
