Investors started 2025 in a more pessimistic mood after enthusiastically adding to equity, bond and mixed asset funds in the last two months of 2024. They withdrew a net £640m from equity funds in January, the only month since late 2023 to see outflows – except for October 2024 when net selling was driven entirely by the need to crystallise profits ahead the anticipated capital gains tax hike in October’s budget.
Key highlights from this month’s FFI:
- Investors sold out a net £640m of equity funds in January after a long stretch of strong inflows
- UK-focused funds shed £1.07bn, the sixth worst month on record, despite record UK share prices
- European and Asian funds also saw net selling, but North American equities garnered net inflows of £576m
- Investors grew much more cautious on fixed income funds, buying as yields climbed and prices fell, and selling when the market rallied
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