2025 saw the largest ever outflows from equity funds after December delivered an unprecedented seventh consecutive month of net selling, according to the latest Fund Flow Index from Calastone, the largest global funds network.
British investors withdrew a net £188m from equity funds in December taking outflows since June 2025 to a net £10.57bn in the largest and most prolonged selling spree on record. 2025 as a whole was down £6.71bn, comfortably the worst year in Calastone’s 11-year data history and more than double the previous record of -£3.34bn set in 2016, the year of the Brexit referendum.
Active funds bore the brunt of 2025’s outflows
Actively managed equity funds bore the brunt of the outflows, shedding £18.9bn of capital in 2025, compared to inflows of £12.2bn for passively managed strategies across all equity funds. Meanwhile passive global equity funds proved more popular than active ones for the first year since at least 2015.
December marked an improvement for equity funds as outflows slowed
The net £188m outflow in December was nevertheless the smallest since June – a considerable improvement on the July-November period when growing panic about a possible Budget attack on pension tax free allowances, among other measures targeting investors, led to widespread selling – October and November each saw outflows exceeding £3.0bn.
December’s improvement was notable in every equity fund sector, either via reduced net outflows or increased inflows. The biggest improvements were in North American funds, where November’s £812m outflow turned into a £107m inflow in December, and global funds, which recovered from -£747m to +£174m. Unloved UK-focused funds saw net selling shrink from £847m to £541m.
Despite UK share prices reaching all-time highs in 2025, outflows from UK-focused funds of £9.55bn almost equalled 2024’s level (£9.56bn) and marked the tenth consecutive year of withdrawals.
Record inflows to safe-haven money market funds
Other asset classes enjoyed a much stronger 2025. Diversified mixed-asset funds came out on top. They attracted a net £11.76bn, down year-on-year, but in line with their 10-year average. Meanwhile, safe-haven money market funds had a record year, absorbing a net £5.84bn of new cash. Fixed income funds saw inflows rise by half to £1.51bn though this was less than half the decade average, reflecting volatile conditions in bond markets. Each of these three asset classes also saw inflows in December.
Edward Glyn, head of global markets at Calastone said: “The sudden, dramatic slowdown in outflows between November and December is a clear indicator that months of pre-Budget speculation contributed to the record outflows from equity funds between June and Budget Day.
“But this isn’t the whole story. Record money market inflows point to investors favouring the safety of cash, suggesting they perceive equity valuations to be teetering after a dramatic 2025 bull run. Solid inflows to mixed asset funds and fixed income support the notion that risk-off is the name of the game at present.”
