Funds enjoy the heat as June records £3.8bn inflows, marking highest level since August 2021, closing a strong H1 2026

6 August 2026: June 2026 recorded significant inflows of £3.8bn from retail investors, marking the highest figure since August 2021 and the eighth consecutive month of inflows, according to data published today by the Investment Association (IA).

June capped a positive first half to the year, with overall retail inflows of £12.3 billion in H1 2026.  Investors adopted more defensive portfolio positioning; this saw inflows across the first half of the year into those areas perceived as lower-risk, including fixed income at £4.5 billion and money market funds at £3.8 billion. Investors also opted for the diversification benefits of mixed asset funds which saw net sales of £7.4 billion in H1.

Equity demand improving

While equity outflows continued at -£7.0 billion in H1, investor sentiment started to show signs of improvement, following the -£14.3 billion of withdrawals recorded in H2 2025.

UK equity outflows moderated to their lowest first-half level for since 2021 at -£3.1 billion compared to -£4.8 billion for the final half of 2025.  Tracker funds delivered their strongest half since H2 2024 with inflows of £9.7 billion, largely powered by flows into equity trackers.

Despite sales to the IA North America sector fluctuating between inflow and outflow each month, it was the only IA equity sector to end the first half in positive territory with inflows of £1.7 billion. This was driven by strong corporate earnings and market enthusiasm around tech and AI. The North American Smaller Companies sector also posted its first inflows of the year in June (£181 million), a potential reflection of the broadening return profile in US markets beyond the Magnificent Seven. However, uncertainty remains around the trajectory of AI and whether the capital expenditure being deployed into the sector will contribute to meaningful growth.

The Global Emerging Markets equity sector turned to outflows of -£1.1 billion in Q2 following inflows of £554 million in the first quarter. Demand at the start of the year as the dollar depreciated and as AI-driven stocks emerging markets in South Korea and Taiwan showed strong performance was later tempered by supply chain disruption in Asia, which is heavily dependent on fuel imports from the Middle East. This brought total sales for H1 to outflows -£562 million.

Other key findings for H1 2026 

• Asian equity: outflows of -£1.6 billion, which were concentrated in Q2 with -£1.1 billion of withdrawals
• European equity: despite recording neutral flows of -£34 million in Q1, European equities closed the half year at an outflow of -£923 million.

• Responsible investment funds: outflows of -£2.7 billion, with outflows from SDR labelled funds at -£1.9 billion 

• Volatility managed funds: inflows of £2.2 billion.
• Active funds: inflows of £2.6 billion through H1 2026, driven by inflows to active fixed income funds.
• Tracker funds: posted inflows of £9.7 billion in H1, with Q2 marking the strongest quarter for tracker funds since Q3 2024. Tracker sales were driven by strong demand for equity trackers, which posted inflows of £6.8 billion whilst active equity funds weathered redemptions of -£13.9 billion.

Commenting on the retail funds data for H1 2026, Miranda Seath, Director, Market Insight & Fund Sectors at the Investment Association, said:

“Despite the geopolitical uncertainty, June recorded the highest monthly inflow since August 2021, closing a strong first half of 2026. Investors have shown resilience by staying invested in the markets, shifting their portfolios to lower-risk strategies, with bonds, diversified mixed assets and cash-like assets leading the way.  

“The headline numbers also only tell half the story, particularly across equities. The North America and Global Emerging Markets sectors were exposed to investors flipflopping between inflow and outflow during the first six months due to their unease around uncertainties relating to AI. Emerging markets chip manufacturers have become key players in the global AI value chain driving strong performance but also creating potential new concentration risks in markets including South Korea.

"Elsewhere, a moderation in UK equity outflows follows a strong year in 2025 for the FTSE. Investors may be taking advantage of a more defensive market composition in the face of broader uncertainty. The UK market has relatively high exposure to 'halo' sectors, those with heavy assets and low obsolescence, such as mining and energy, which are often viewed as more resilient during periods of uncertainty and offer a counter trade to investments in AI and tech stocks helping to diversify portfolios.”

The picture in June 2026

In June, news of the US-Iran Islamabad Memorandum of Understanding helped to reduce pressure on oil prices, dampening expectations of rising inflation and easing the anticipation of further interest rate hikes. However, UK investor demand remained concentrated in more defensive allocations, including fixed income strategies, which in June saw significant monthly inflows of £2.3 billion, the highest figure recorded since January 2021 and a substantial increase on May’s £1.5 billion.

Other key findings for June 2026  

• Fixed income funds: of the £2.3 billion inflows into fixed income, government bonds led the charge at £674 million, followed by strategic bonds and corporate bonds at £480 million and £217 million respectively.  

• Equity funds: outflows of -£1.1 billion, an easing on the -£1.5 billion outflow seen in May 

• North America: the only region to see equity inflows in June, with a strong month of £1.0 billion, following several months of positive market performance and a robust earnings season. The MSCI USA index returned 11.4% for the year-to-date at the end of June in sterling terms.

• Money market funds: inflows of £924 million, the highest inflow to the asset class since the record £2.0 billion in March 2026

• Responsible investment funds: outflows of -£545 million, with outflows from SDR labelled funds at -£267 million

• Volatility Managed funds: inflows of £385 million in June, on par with the 12 monthly average of £355 million.
• Tracker funds saw inflows of £3.6 billion, with £1.9 billion placed in equity tracker funds, where sales were concentred to Global and North American markets. In contrast, inflows to active funds sat at a modest £136 million, with active equity funds experiencing outflows of -£3.0 billion in June, an increase on May’s outflow of -£2.0 billion.  

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APPENDIX

FUNDS UNDER MANAGEMENT AND NET SALES – June2026

	Funds Under Management	Net Retail Sales	Net Institutional Sales
June 2026	£1.7 trillion	£3.8 billion	-£2.9 billion
June 2025	£1.5 trillion	£215 million	-£1.3 billion

BEST SELLING INVESTMENT ASSOCIATION SECTORS                                                               

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

• Short Term Money Market saw net retail inflows of £917.1 million                                 
• North America saw net retail inflows of £837.6 million                                                                  
• Government Bond saw net retail inflows of £674.4 million                                                           
• £ Strategic Bond saw net retail inflows of £479.5 million                                                               
• Volatility Managed saw net retail inflows of £385.3 million                                                           

The worst-selling Investment Association sector in June 2026 was Global, which experienced outflows of £1.34 billion

NET RETAIL SALES BY ASSET CLASS

• Mixed asset saw £1.20 billion in inflows.
• Fixed income saw £2.26 billion in inflows.
• Other saw £477 million in inflows.
• Money market saw £924 million in inflows.
• Property saw £37 million in inflows.
• Equities saw £1.11 billion in outflows.       

NET RETAIL SALES OF EQUITY FUNDS BY REGION

• North America funds saw net retail inflows of £1.02 billion.
• Japan funds experienced outflows of £126 million.
• Europe funds experienced outflows of £208 million.
• Asia funds experienced outflows of £485 million.
• UK funds experienced outflows of £561 million.
• Global funds saw net retail outflows of £1.47 billion.

TRACKER FUNDS

Tracker funds saw net retail inflows of £3.63 billion in June 2026. Tracker funds under management stood at £450.2 billion at the end of June. Their overall share of industry funds under management was 26.0%. 

RESPONSIBLE INVESTMENT FUNDS

Responsible investment funds saw a net retail outflow of £545 million in June 2026. Responsible investment funds under management stood at £113.3 billion at the end of June. Their overall share of industry funds under management was 6.5%.