Calastone data shows equity funds suffered a record £3.63bn outflow in October, taking withdrawals since June to £7.36bn as investors sold across all sectors and moved into safer money market and fixed-income funds.
Equity funds suffered their largest outflows on record in October, according to the latest Fund Flow Index from Calastone, the largest global funds network. Investors withdrew a net £3.63bn from their equity fund holdings, marking a fifth consecutive month of outflows from the asset class, the longest stint of selling since the Brexit referendum in 2016. Between June and October, investors have pulled a net £7.36bn out of equity funds, easily the largest outflow on Calastone’s record.
Notably, every equity fund category saw net selling. UK-focused funds accounted for one third of the net selling – investors withdrew £1.22bn from the sector, taking the total since the run-up to 2025’s tax-raising budget to £10.42bn. An unprecedented fifth consecutive month of net selling in global funds saw a record £911m leave the sector, while North American funds shed £649m, their third worst month on record. Sector-focused equity funds also saw large outflows – the net £220m was almost entirely withdrawn from technology funds.
Safe-haven money market funds were the main beneficiary of investor sale proceeds. Inflows of £955m were a new record. Fixed income funds also had a good month with inflows of £589m, focused on corporate bonds and flexibly-managed funds – investors steered clear of sovereign bond funds.
Edward Glyn, Head of Global Markets at Calastone said:
“Two forces are driving investor behaviour. One is simply nerves about global equity prices, especially in the US. Outflows from global, US and tech funds are all part of that story. Fears of high share prices also explain why money market and fixed income funds both had a good month – cash rolling out of equity funds needs somewhere to go, especially for those who don’t want to lose the tax protection of an ISA or pension wrapper.
“The other force stems from growing concern about Rachel Reeves’s budget and the anticipated tax implications. For some, it’s a simple matter of crystallising capital gains in case rates go up. This drove a huge uptick in selling this time last year and it’s clearly round two in 2026.
“For many others it’s about pensions. The tax-free lump sum that over 55s may draw from their pensions is such a vital part of most people’s retirement planning that the risk it will be scrapped or drastically scaled back is simply too concerning for many diligent pension savers in their 50s and beyond to contemplate.
“Speculation on policy has made this drastic step the only rational choice for many, even if it may ultimately harm their longer-term financial goals.”
