July saw inflows into funds despite domestic political changes and conflict in the Middle East

3 September 2026, London: Net retail sales recorded inflows of £278 million in July, marking nine consecutive months of positive flows. While this represents a sharp decline from the £3.6 billion recorded in June, the sustained streak of positive flows underscores continued investor confidence, according to data published today by the Investment Association (IA).

The trend of equity outflows continued in July with a total of -£2.1 billion amid continued conflict in the Middle East. In particular, UK equities saw significant outflows of £1.6 billion, the highest figure since January 2025. This was likely influenced by a period of political transition in the UK, with investors taking a cautious stance amid renewed debate on public finances with pressures from cost-of-living support, defence and borrowing costs.

Across other equity regions, North America funds attracted £192 million and Global funds received £50 million. Europe returned to inflow for the first time since March, with net sales of £23 million following outflows of £221 million in June. Asia and Japan remained in negative territory, recording outflows of £97 million and £81 million, with the Global Emerging Markets sector recording a fourth consecutive month of outflows.

Key findings for July 2026

• Fixed income funds experienced a fourth month of inflows with £863 million in July, driven by positive flows into Government Bond (£333 million), Strategic Bond (£319 million), Mixed Bond (£181 million) and Specialist Bond (£122 million), as investors to seek potentially less volatile exposure than equities.
• Equity funds experienced outflows of -£2.1 billion, an increase on the -£1.3 billion seen in June.
• Mixed asset funds attracted £733 million, down from £1.2 billion in June, as investors continued to seek diversified exposure.
• Money market funds recorded inflows of £206 million, supported by £406 million flowing into the Short Term Money Market sector, as investors favoured highly liquid investments amid heightened market uncertainty.
• Responsible investment funds saw outflows drop to -£123 million in July, the smallest outflow since April 2024. Comparatively, outflows from SDR labelled funds remained high at -£317 million, suggesting some investors have softened towards ‘light green’ funds running exclusions.
• Volatility Managed funds attracted £444 million, slightly above June’s £385 million. Inflows into the sector have historically remained consistent across different periods of market volatility.
• Equity index trackers received £751 million, while active equity funds saw outflows of £2.9 billion. When investors become more cautious about prospective market volatility, active equity fund outflows tend to rise, while equity tracker sales are comparatively stable.

Global Emerging Markets respond to volatility

The Global Emerging Markets sector entered its fourth month of outflow in July at -£383 million, as investors continued to be cautious amid heightened market volatility and geopolitical uncertainty.

This sentiment was compounded in July by hard losses suffered by Korean equities, with the flagship KOSPI index seeing a 17% drop over the month in GBP terms, following a strong performance in the first half of the year with 91% returns. Growing concerns over the capital expenditure deployed to AI sparked steep drops Korean equity markets whose recent performance has been dominated by chipmakers SK Hynix and Samsung. Initial volatility was exacerbated as heavy use of margin loans and leveraged products by Korean retail investors magnified losses and forced sales.

At the same time, renewed conflict in the Middle East further drove investor caution as some emerging markets economies, particularly in Asia, are heavy oil importers. For UK investors, this combination of concentrated technology exposure, leveraged market activity and sensitivity to energy prices appears to have reduced demand for funds investing across emerging markets.

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

“As domestic and geopolitical uncertainty grows, July saw modest net retail sales of £278 million and a six-month low for gross sales at £30.1 billion, a sharp decline to the inflows experienced in H1. The composition of flows points to more cautious positioning, with investors continuing to favour fixed income and mixed asset funds while stepping back from equities.

“Investors will be looking ahead to the new Government’s first Autumn Budget and the forthcoming 10-year plan for Britain in order to inform investment decisions based on the direction of economic, tax and investment policy, particularly in light of renewed inflationary pressure further tightening the UK’s fiscal headroom. While July’s uncertainty has led to muted flows, this month’s data suggests that many investors are not withdrawing from markets altogether, but are remaining selective and continuing to seek diversified, lower-cost exposure alongside more defensive allocations.”

Full monthly data is available here.

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APPENDIX 

FUNDS UNDER MANAGEMENT AND NET SALES – July 2026 

	Funds Under Management	Net Retail Sales	Net Institutional Sales
July 2026	£1.72 trillion	£278 million	-£286 million
July 2025	£1.55 trillion	-£274 million	-£7.8 billion

BEST SELLING INVESTMENT ASSOCIATION SECTORS   

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

• Volatility Managed saw net retail inflows of £444.0 million
• Short Term Money Market saw net retail inflows of £406.3 million
• Global saw net retail inflows of £376.8 million
• Government Bond saw net retail inflows of £333.2 million
• £ Strategic Bond saw net retail inflows of £319.4 million

The worst-selling Investment Association sector in July 2026 was UK All Companies which experienced outflows of £1.3 billion.   

NET RETAIL SALES BY ASSET CLASS  

• Fixed income saw £863 million in inflows. 
• Mixed asset saw £733 million in inflows. 
• Other saw £589 million in inflows.  
• Money market saw £206 million in inflows.  
• Property saw £0.05 million in outflows. 
• Equities saw £2.1 billion in outflows. 

NET RETAIL SALES OF EQUITY FUNDS BY REGION*   

• North America funds saw net retail inflows of £192 million. 
• Global funds saw net retail inflows of £50 million. 
• Europe funds saw net retail inflows of £23 million.
• Japan funds experienced outflows of £81 million.  
• Asia funds experienced outflows of £97 million. 
• UK funds experienced outflows of £1.6 billion. 

TRACKER FUNDS  

Tracker funds saw net retail inflows of £1.84 billion in July 2026. Tracker funds under management stood at £447 billion at the end of July. Their overall share of industry funds under management was 25.9%.  

RESPONSIBLE INVESTMENT FUNDS  

Responsible investment funds saw a net retail outflow of £123 million in July 2026. Responsible investment funds under management stood at £112 billion at the end of July. Their overall share of industry funds under management was 6.5%.