Demand for equity index trackers pushes retail flows positive at £484 million in January

5 March 2026, London – Net retail sales recorded inflows of £484 million in January, marking a third consecutive month of positive flows to kick off the new year, according to data published today by the Investment Association.

Sales slowed in January after December’s £1.9 billion inflows, with headline equity redemptions of £2.0 billion driving outflows.

However, looking beneath the surface of headline equity data reveals strong inflows (£1.1 billion) into equity index trackers across Global and North American sectors, whilst active equity grappled with substantial outflows of -£3.1 billion. This suggests a tempered return to low-cost equity exposure.

Looking across other asset classes, market uncertainty compounded by a febrile geopolitical climate has continued to support fund flows to liquid, defensive money market funds, which drew inflows of £712 million. Mixed asset funds received a further £630 million inflow, signalling a preference for diversification and risk management against an uncertain global backdrop.

Whilst down on December 2025, fund flows are proving far more resilient than in January last year, when market uncertainty helped to drive £3.1 billion in outflows. Instead, we have seen investors adjust to the potential volatile equity markets that have performed well over the last 6 months, alongside pivoting into liquidity funds and diversified assets, investors are returning to US and global equities through index funds.

 

Key findings for January 2026

• Equity outflows rose to £2.0 billion in January, a substantial increase on December’s £206 million. Redemptions were broad-based, led by UK (-£684 million) and Global (-£532 million) but outflows were from active equity funds as index tracker sales held up. Global Emerging Markets was one of the only equity sectors to see inflows overall (£135 million), as investors took advantage of US dollar depreciation.
• Tracker funds attracted £1.3 billion (£1.7 billion December).  Equity tracker inflows were concentrated to Global (£479 million) and North America (£461 million).
• Active funds saw outflows of -£843 million after two months of inflows in November and December, driven by active equity redemptions of -£3.1 billion (Global -£848 million; North America -£548 million).
• Fixed income saw inflows of £491 million, consistent with £406 million in December. Inflows were driven by Corporate Bond (£353 million) and UK Gilts (£142 million), marking a third consecutive month of UK gilt inflows. GEM Bond – Local Currency returned to inflows (£159 million), while Government Bonds (-£19 million) remained in outflow.
• Money market funds saw £712 million of inflows. Sales to Short-Term Money Market funds were £337 million reflecting defensive positioning.
• Mixed asset received £630 million of inflows, a third consecutive positive month.
• Other sectors saw £725 million of inflows, led by Volatility Managed (£377 million). Targeted Absolute Return attracted £130 million; Commodities & Natural Resources saw a rare month of inflows with £80 million as investors start to look at sectors exposed to physical assets as a counterpoint to industries where business models are vulnerable to AI.
• Responsible investment outflows eased to -£271 million following -£404 million in December.

 

Equity trackers dominate equity sales despite headline equity outflows

January’s £2.0 billion equity outflows were driven by stronger outflows from actively managed equity funds, with investors pulling -£3.1 billion. Global sector active equity funds dominated outflows with -£848 million (Global is the largest IA sector by FUM), while active North American active equities also saw heavy outflows of -£548 million, a further increase on the monthly average of -£428 million over the second half of 2025.

Despite the potential for the AI bubble to burst, mega-cap tech firms helped to drive positive US returns through 2025. January data suggests that investors haven’t turned away from low-cost exposure to the US but actively managed funds continue to suffer. Active equity funds saw substantial outflows over the second half of 2025 with a monthly average of -£3.1 billion.  January’s reacceleration brings outflows back into line with this average after a relatively modest -£1.4 billion outflow in December.

Index tracking equity funds meanwhile saw continued inflows of £1.1 billion, only a slight decline on £1.2 billion in December and remaining above the £700 million average for H2 2025. Global (£479 million) and North America (£461 million) continued to dominate inflows as in December, having rebounded after minimal inflows in October and November. Europe ex UK trackers saw net sales of £74 million in January, remaining in inflow but below the average £128 million over the second half of 2025 when European equities benefitted from investors seeking increased diversification away from the US.

 

 

Investors adapt to ongoing geopolitical uncertainty

The tactical, risk-off positioning that brought higher sales to money market and mixed asset funds to in 2025 has continued into the new year. At the beginning of 2026, Heightened tensions between the US and Europe over Greenland, and the capture of Venezuelan President Nicolás Maduro brought tariff and military concerns to the fore but the impact on markets was muted.

In this environment, investors remain cautious overall as net retail inflows slowed and investors showed preference for money market (£712 million), mixed asset (£630 million) and fixed income (£491 million) funds.

Inflows of £491 million across fixed income sectors in January is broadly consistent with last month (£406 million). Demand was strongest for Corporate Bond (£353 million), Global Emerging Markets Bond – Local Currency (£159 million), a sector benefitting from a weaker dollar, and UK Gilts (£143 million). Despite inflows to UK Gilts, more broadly Government Bond funds remained in outflow in January (-£83 million).. Corporate Bonds also saw redemptions of -£97 million over the month.

 

Diversification away from US equities has benefited Europe but not the UK

Despite renewed interest in Global and North American equity trackers, regional equity flows suggest some investors are continuing to diversify away from US-dominated exposure. UK equity outflows remained consistent month-on-month at -£684 million, an improvement on the heavy outflows of recent years. Europe saw comparatively limited redemptions (-£86 million) after leading regional inflows through much of 2025. Global Emerging Markets equity attracted £135 million, supported by a weaker US dollar and increased appetite for diversification beyond developed markets.

 

Miranda Seath, Director, Market Insight & Fund Sectors at the Investment Association, said: “Inflows of £484 million in January is a positive result in an environment of persistent geopolitical uncertainty. Investors have moved back to allocating to US and Global equities but have chosen exposure through low-cost index funds. This follows solid US market performance in 2025. But as high active equity outflows show, investors are still managing their exposure to risk assets – flows to fixed income and money market funds (£712 million) confirm that many investors remain wary of market volatility. 

“Looking ahead, and particularly as we wait to see the impact of the Iran conflict on the cost of energy and consequently price inflation, it is important to remember that investing remains critical to delivering growth compared with cash, where inflation could erode savings longer term. With the Chancellor signalling policy stability with a measured Spring Statement and ISA season approaching on 6 April, the coming months will show whether confidence in markets could continue to rebuild. However, elevated geopolitical risks —may serve as a reminder to investors on how quickly volatility can return to financial markets”

ENDS

 

APPENDIX 

FUNDS UNDER MANAGEMENT AND NET SALES – January 2026 

	Funds Under Management	Net Retail Sales	Net Institutional Sales
January 2026	£1.63 trillion	£484 million	-£1.83 billion
January 2025	£1.54 trillion	-£3.10 billion	-£2.23 billion

 

BEST SELLING INVESTMENT ASSOCIATION SECTORS   

 The five best-selling Investment Association sectors for January 2026 were:   

1. Volatility Managed saw net retail inflows of £377.4 million
2. £ Corporate Bond saw net retail inflows of £352.8 million
3. Short Term Money Market saw net retail inflows of £336.8 million
4. Global Emerging Markets Bond – Local Currency saw net retail inflows of £159.4 million
5. UK Gilts saw net retail inflows of £143.5 million

The worst-selling Investment Association sector in January 2026 was UK All Companies which experienced outflows of £418.8 million.   

NET RETAIL SALES BY ASSET CLASS  

Other saw £725 million in inflows.  

Money market saw £712 million in inflows.  

Mixed asset saw £630 million in inflows. 

Fixed income saw £491 million in inflows. 

Property saw £89 million in outflows. 

Equities saw £2.0 billion in outflows. 

NET RETAIL SALES OF EQUITY FUNDS BY REGION*   

Europe saw net retail outflows of £86 million.  

North America funds experienced outflows of £146 million. 

Japan funds experienced outflows of £153 million.  

Asia funds experienced outflows of £313 million. 

Global funds saw net retail outflows of £532 million. 

UK funds saw net retail outflows of £684 million. 

TRACKER FUNDS  

Tracker funds saw net retail inflows of £1.33 billion in January 2026. Tracker funds under management stood at £408 billion at the end of January. Their overall share of industry funds under management was 25.1%.  

RESPONSIBLE INVESTMENT FUNDS  

Responsible investment funds saw a net retail outflow of £271 million in January 2026. Responsible investment funds under management stood at £107 billion at the end of October. Their overall share of industry funds under management was 6.6%.