Fund flows mark tenth consecutive positive month in August – what are UK investors buying and selling?

Fund flows from UK retail investors were positive during August for the tenth consecutive month, but some sectors have seen outflows.

Latest data from the Investment Association (IA), an industry body representing the UK’s fund managers, shows UK-based investment funds registered £894 million in net sales to retail investors during August, in marked contrast from the £1.8 billion in outflows registered in the same month last year.

“Despite the summer break typically slowing flows and a worsening outlook for price inflation… investors kept their cool and carried on investing through the warmer weather,” said Miranda Seath, director, market insight & fund sectors at the IA.

^{Source: The Investment Association}

August’s positive figure brings the total net retail fund flows in the first eight months of 2026 to £13.8 billion.

Monthly net retail fund flows have been positive ever since October 2025, which saw £4.6 billion in outflows.

Which asset classes were the most popular in August?

While investors were net buyers of funds in general during August, though, there were significant differences between funds targeting different asset classes.

Fixed income and mixed asset funds were the most sought-after, registering inflows of £656 million and £749 million respectively.

Equity funds, though, saw £478 million in outflows during the month. While that sounds like bad news for the stock market, it actually represents a substantial slowing of outflows compared to July, when nearly £2 billion of capital flowed out of equity funds.

^{Source: The Investment Association}

Money market funds saw net outflows of £728 million in August following three consecutive months of positive flows.

Which equity fund sectors saw the biggest outflows during August?

Equity funds across the board showed net outflows during August, and besides global funds – which registered net inflows of £568 million – no individual sector saw significant positive flows during the month.

However, the £459 million that left equity funds in August was an improvement following three consecutive months of £1.4 billion+ outflows (peaking at £1.86 billion outflows in June).

Funds investing in UK stocks saw the biggest outflows during August, with £615 million leaving this sector. Again, though, this was an improvement compared to July, when £1.65 billion left the sector.

Flows into North American funds turned negative, from £201 million inflows in July to £363 million outflows during August, while outflows from Asian funds accelerated from £49 million in July to £114 million in August.

There were modest positive inflows for funds targeting European and Japanese stocks, with these sectors netting inflows of £40 million and £25 million respectively.

Should you invest in funds?

Funds offer a versatile approach to investing across almost any type of asset class. They can work in a wide variety of market environments, as evidenced by the inflows and outflows across different sectors the August data reveals.

The IA noted that it is natural for uncertainty to creep into decisionmaking when it comes to buying funds.

“Market conditions alone do not determine investor behaviour,” said the IA’s Seath. “The domestic policy environment plays an equally critical role. With the Autumn Budget fast-approaching, it is worth remembering that policy stability is a fundamental pillar of investor confidence.

“In October 2025, the last full month before the previous Budget, UK retail investors withdrew £4.5 billion from investments, including £1.4 billion from UK equities, amid concerns about reported tax changes,” she added.

If you are new to investing in funds, it is worth considering that some funds are better for beginners than others. You should do your research thoroughly and consider where any given fund fits with your overall goals and risk tolerance before diving in.