Money market funds back in favour as investors rebuild cash positions during volatile ISA season

Investor behaviour on Fidelity International’s Personal Investing platform in March suggests retail investors adopted a more cautious stance at the peak of ISA season, increasing allocations to cash funds alongside a continued mix of global equities and income-generating assets.

The return of cash funds follows two notable months in January and February where they were entirely absent from the best-seller lists for the first time in more than two years. In March, however, cash funds dominated flows, with six of the top 10 best-selling funds made up of cash-like strategies.

While often used by investors seeking lower volatility, cash funds are investments rather than cash deposits. They can, however, play an important role in portfolios by offering liquidity and relative stability compared to higher risk assets. Allocation to lower-risk assets is a legitimate and expected part of balanced portfolios, both strategically and tactically. 

This shift comes amid heightened geopolitical tensions following recent developments in the Middle East, which have contributed to increased market volatility. It also comes against the backdrop of recent government announcements on ISA reform, bringing renewed focus to the role of cash funds and cash-like investments within Stocks & Shares ISAs and underlining the value many investors place on liquidity, stability and flexibility at unpredictable times.

The best-selling funds, shares and investment trusts on Fidelity Personal Investing March 2026

Funds	Shares	Investment Trusts
Fidelity Cash Fund	Legal & General Group	International Public Partnerships
Royal London Short Term Money Market Fund	International Consolidated Airlines Group	F&C Investment Trust
Fidelity Index World Fund	easyJet	Greencoat UK Wind
Legal & General Cash Trust	Croda International	CT Private Equity Trust
Vanguard FTSE Global All Cap Index Fund	Taylor Wimpey	Patria Private Equity Trust
Lazard Emerging Markets Fund	Vistry Group	Foresight Environmental Infrastructure
Aberdeen Sterling Money Market Fund	Aviva	Henderson Far East Income
HSBC FTSE All World Index Fund	Barclays	The Renewables Infrastructure Group
Dodge & Cox Worldwide Funds – Global Stock Fund	Diageo	Merchants Trust
BlackRock Cash Fund	HSBC Holdings	The Global Smaller Companies Trust

Ed Monk, Pensions and Investment Specialist at Fidelity International comments: “March saw a clear return to more liquid investments such as cash funds. After two months in which cash funds were entirely absent from the best-seller lists – something we hadn’t seen for over two years – they re-emerged strongly as investors responded to a more uncertain market backdrop.

“Cash funds can play an important role at times like this, offering stability and flexibility while investors assess where to allocate capital next. 

A shift from ISA season positioning 

“Several of the globally focused and income funds that dominated flows earlier in the year fell out of the top rankings in March, as investors rotated away from growth-oriented positions and back towards liquidity. This suggests a pause for breath at the end of the ISA season, with investors choosing to phase their investments rather than commit new money all at once.

Global exposure remains core

“Despite the increase in cash allocations, global equity funds continued to feature prominently. Fidelity Index World Fund and Vanguard FTSE Global All Cap Index Fund both remained among the most-bought funds, alongside interest in emerging markets through Lazard Emerging Markets. 

UK income in focus 

“Among individual shares, there was a clear tilt towards UK-listed companies, particularly those offering income. Legal & General, Aviva, Barclays and HSBC all featured, highlighting continued demand for dividend-paying financials. 

“Travel-related stocks also proved popular, with International Consolidated Airlines Group and easyJet both appearing in the top 10. The conflict in the Middle East has created a challenging backdrop for airlines, with airspace disruptions and a sharp rise in oil prices pushing up fuel costs but demand for travel remains resilient and consumers seem to be adjusting – rather than cancelling – their plans. 

“At the same time, airlines such as IAG and easyJet have shown some resilience in markets, even as share prices have experienced periods of volatility.

Infrastructure and income stability
“Investment trusts in March reflected a continued preference for income and real assets. Infrastructure-focused names such as International Public Partnerships and Greencoat UK Wind featured prominently, alongside diversified trusts like F&C Investment Trust.

“These strategies offer investors a combination of income, diversification and resilience, which can be particularly attractive during periods of market uncertainty.”

A more cautious end to ISA season

“As ISA season draws to a close, our data suggests investors are taking a measured approach – maintaining flexibility in the short term while remaining positioned for longer-term opportunities.

“As we enter the new tax year, investors don’t need to rush into making big investment decisions. Drip-feeding investments over time can help manage market volatility, while holding some money in cash within an ISA provides flexibility to invest when opportunities arise.

“What’s important is staying diversified and focused on long-term goals rather than reacting to short-term market movements.”

ISA flexibility is critical 

Fidelity International believes the strength of the ISA has always been in its simplicity and flexibility. Introducing unnecessary restrictions risks undermining consumer confidence in the wrapper at a time when the government is encouraging more people to invest.

We believe products such as money market funds should continue to qualify for the same tax-free treatment as other investments. These are genuine investment options that play an important role in balanced portfolios, helping investors manage risk and adjust their exposure as market conditions change, and are often a first step for those beginning their investment journey.

Periods of volatility underline why this flexibility matters, allowing investors to move between asset classes – including into lower-risk investments such as cash funds – without friction.