The £4.8bn total inflows for Q2 came against a backdrop of turbulent geopolitics and economic uncertainty driven by US President Donald Trump’s tariff war. Credit: iStock
UK investors contributed with £438m to funds in June, marking a more positive end to the first half of 2025.
This came as net fund inflows hit £2.9bn in H1 2025, with investors taking advantage of market volatility and beginning to funnel more capital into funds, according to research from the Investment Association released today (7 August).
US-EU trade deal replaces uncertainty with 'damage control'
The £4.8bn total inflows for Q2 came against a backdrop of turbulent geopolitics and economic uncertainty driven by US President Donald Trump's tariff war.
According to the IA, this backdrop "polarised investor behaviour, with some taking advantage of market volatility through April and ‘buying the dip', boosting sales to North American equities".
Other retail clients opted for a more conservative approach, preferring to exercise caution and diversify their portfolio by moving into European equities.
In June, inflows into North American funds were broadly flat, with just £52m in net flows, while European equities attracted £198m.
However, this was a significant fall from the £450m that European equity funds pulled in during May, as market jitters around the White House's trade war began to shake out.
Money put into index trackers remained strong, with £1.1bn of inflows in June, while money market funds, mixed asset, and fixed income funds added £823m, £502m and £193m, respectively.
'The sugar is coming' for the US amid more positive policy direction
Miranda Seath, director, market insight and fund sectors at the IA, said: "After a rocky start to 2025, we are starting to see the mood shifting amongst investors. Despite Q1 2025 recording outflows of £1.9bn, June continued the trend of monthly inflows and markets have remained resilient in the face of trade wars and uncertain tariff policy."
Despite the improved figures, she concluded that "the current crop of investors is keeping a close eye on the UK economy - the chancellor's plans for this year's Autumn Budget will be significant and investors will wait to see the impact of potential tax rises and if the economic outlook will improve".
