Equity fund inflows finally returned in April, but oil shock meant only US-heavy funds benefitted

UK investors jumped back into equity funds in April after a record 10-month stint of selling, according to the latest Fund Flow Index from Calastone, the largest global funds network. They added a net £1.08bn to equity funds, making April 2026 the best month for inflows since April 2025.

Investors were choosy. They only committed new capital to US equity and global equity funds (these are US-heavy), which saw inflows of £1.14bn and £1.33bn respectively. Every other category of equity funds saw outflows. Asia Pacific was the hardest hit, with investors pulling out £383m, while emerging markets suffered outflows of £355m. European equity funds were hit with net selling of £104m. Funds focused on UK equities also saw outflows, though at £342m, this was the best result for UK-focused funds since December 2024 when flows were distorted by the aftermath of UK budget speculation.

Index funds were the vehicle of choice for the new cash. Investors added £2.63bn to index tracking funds, but sold £1.55bn of active funds. The £4.2bn difference between the two in favour of passive funds was the third largest on Calastone’s record.

Edward Glyn, head of global markets at Calastone said: “The war in the Middle East has strangled energy and feedstock flows to large parts of the world – leaving US supplies largely intact, even if prices are higher. The expected economic fallout means that Asia and Europe – the worst affected regions – saw stock markets either flat or down during April. The gloomy outlook drove outflows from funds invested in most parts of the world. 

“It was a very different picture for the US. The US market surged by almost 10% as softer data brought forward expectations for cuts from the Federal Reserve. That shift disproportionately lifted rate-sensitive tech hyperscalers, while earnings were good enough at the index level to support the move, despite remaining uneven across sectors.

“The rally still looks narrow, with a small group of large-cap names doing most of the work, but it was strong enough to pull flows back into US and global equity funds, where US exposure typically dominates.

“For momentum investors, simply buying index funds makes sense, which helps explain the particular skew to index funds in April.”

Safe-haven money market funds may have funded some of the inflows to equities in April. Investors had added £3.78bn to money market funds during the 10 months of equity outflows between June 2025 and March 2026. In April, they withdrew £671m, just as flows to equities finally turned positive.

The shake out in fixed income funds in March ceased in April – outflows were negligible at £27m as higher yields tempted new buy orders.