Volatile stock markets failed to deter investors in March, according to the latest Fund Flow Index from Calastone, the largest global funds network. UK investors added a net £1.38bn to equity funds, the best month of the year so far for the asset class.
North American equities saw third best monthly inflows on record
US equities were easily the most popular category, despite Wall Street’s sharp 2025 declines continuing in March. UK investors added a net £1.77bn to their North American equity fund holdings, the strongest month for inflows since March 2024 and the third best on record. Most of this cash went into funds focused exclusively on the US. Investors overwhelmingly opted for index trackers, which attracted £8 in every £10 of the inflows to North American equity funds. Global funds, which are dominated by US equities, and which have been by far the most popular fund sector in recent years[1], came a distant second in March, with £580m of inflows.
Trading volumes in North American funds jumped – bulls and bears disagree
Notably, the volume of transactions in North American equity funds was especially large. Buy and sell orders totalled a record £7.8bn, 47% more than the average monthly volume for over the last year.
European equities saw inflows as share prices rose
Meanwhile European equity funds had their best month since July 2024, with £217m of inflows, while emerging-market inflows totalled just under half this level. Of the main geographical sectors, only Asia-Pacific and UK-focused funds saw outflows.
UK-focused funds suffered their worst ever quarter, despite higher UK stock market
UK-focused funds were especially weak, in line with their trend of recent years. Despite the UK market outperforming the global index in 2025, investors remained very negative on the sector. They withdrew a net £1.19bn in March, taking the total year-to-date to £3.48bn, the worst calendar quarter on record for UK-focused funds, and the second-worst of any three month period.
Bond funds suffered outflows while safe-haven money-market funds enjoyed a record quarter
Among other asset classes, the biggest change was for fixed income funds. Many bond markets weakened in March as inflation fears rose – the biggest exception was the US treasury market, where growing worries about a US recession pushed yields lower (yields move inversely to prices). Investors sold down a net £700m of their bond fund holdings in March, the worst month since September 2024, and reversing most of the purchases year-to-date. Meanwhile, safe-haven money-market funds absorbed £513m of new cash, taking the Q1 total to £1.45bn, the best calendar quarter on record for the sector and the third best three-month period.
Edward Glyn, head of global markets at Calastone said: “Seasonal patterns help explain some of the uptick in equity fund buying in March as investors typically look to use up ISA allowances at this time of year. In each of the last four years, March has been one of the four best months for inflows – but ISA appetite alone rarely trumps sagging markets.
“The strong appetite for US equities in March is at odds with tidal forces in global markets that are seeing a strong rotation out of US assets and into markets like Europe and the UK. It may well be that some investors judge the recent falls to be a dip worth buying. Certainly record volumes of US fund trades in the context of the US-market weakness suggest there is a significant amount of disagreement among investors. The numbers trading out and those trading in are much larger than usual.
“Bond flows perhaps tell us more about underlying investor sentiment at present. In the bond markets, higher yields have proved tempting to investors in recent months, but this was not the case in March. Headlines dominated by talk of trade wars, economic uncertainty and inflation have seemingly put bond investors off the asset class for the time being. Strong flows into safe-haven money market funds suggest uncertainty is a key motivator.”
