UK investors ended an equity inflow drought in April, bringing an end to a 10-month-long selling spree.
UK investors added £1.1bn in equity funds last month, according to the latest fund flow index from Calastone, marking the best month of inflows since April 2025.
But flows were concentrated, with investors opting to commit capital to US equities and US-heavy global equity funds, which saw inflows of £1.1bn and £1.3bn, respectively.
In contrast, all other categories saw outflows, with the Asia Pacific region recording the heaviest, with investors pulling out £383m.
Emerging markets also suffered, recording outflows of £355m, despite more investors eyeing tech stock investments in the region to diversify away from the US.
European equity funds saw selling of £104m, while UK equities also saw outflows of £342m.
While the UK outflows reinforced the view that many analysts are continuing to shun the UK stock market in favour of other markets, including the US, it was the best result for UK-focused funds since December 2024, when flows were damaged by the Autumn Budget.
War in the Middle East
Calastone credited the concentrated inflows to the Middle Eastern conflict, arguing the US has not been as impacted by the fallout.
Edward Glyn, head of global markets at Calastone, said: “The war in the Middle East has strangled energy and feedstock flows to large parts of the world, leaving US supplies largely intact, even if prices are higher.
The expected economic fallout means that Asia and Europe, the worst-affected regions, saw stock markets either flat or down in April. The gloomy outlook drove outflows from funds invested in most parts of the world.”
Glyn noted the rally in the US “still looks narrow, with a small group of large-cap names doing most of the work”, but the gains were strong enough to pull flows back into US and global equity funds.
Safe-haven money market funds may also have skewed inflows to equities, as investors withdrew £671m in April, following adding £3.78bn in the ten months of outflows between June 2025 and March 2026.
Property fund outflows ease
UK investors continued to withdraw money from property funds in April, but the pace slowed to £21m, less than half the average in recent months.
It is also the third best month for property funds since June 2024.
Both buy and sell orders increased in April, but buy orders rose more sharply, by 25 per cent, compared to 2 per cent.
Edward Glyn, head of global markets at Calastone, said: “Higher income yields, following the repricing of assets through 2024 and 2025, may be beginning to attract capital back into the asset class.
“It is too early to call a full turnaround, not least because the economic calm from the Middle East crisis is likely to turn stormy soon. Even so, the sharp slowdown in outflows suggests sentiment may be stabilising.”
