The most prolonged and most severe bout of equity-fund outflows continued unabated in November, according to the latest Fund Flow Index from Calastone, the largest global funds network. Investors pulled a net £3.02bn from equity funds during the month, the second-worst month on record. This follows October’s worst ever month for equity funds (-£3.63bn) and extends to six months an unbroken run of withdrawals.
Record-Breaking Six-Month Exodus
Between June and November, investors have now sold down £10.39bn of their equity fund holdings – making this both the longest period of selling and the most severe.
Budget Day Brings an Abrupt Reversal
Daily trading patterns showed that outflows ceased on 26th November – Budget Day. On Wednesday 26th, Thursday 27th and Friday 28th, inflows resumed. Every other day of November in the run up to Budget Day except one had seen net selling.
UK and North America Hit Hardest
North American and UK-focused equity funds were hardest hit, the former shedding a record £812m, while the latter saw net selling of £847m. Only one month out of the last 55 has seen inflows to UK-focused funds and that followed Rachel Reeves’ first budget in 2024 when investors crystallised capital gains in the weeks running up to her expected capital gains tax raid, before recycling the cash back into funds afterwards.
Global funds, which are heavily US-weighted, were also hit hard in November in an unprecedented sixth consecutive month of selling for the sector, shedding £747m. Among all the equity-fund sectors, only Europe-focused funds saw an inflow, totalling a net £78m.
Edward Glyn, head of global markets at Calastone said: “The political narrative has played havoc with UK savers in recent months. Never have we seen such consistent or large-scale selling before. The sudden halt in equity-fund outflows that took place after the budget was delivered is clear evidence that many investors were selling their holdings as concerns rose at the possible curtailment of pension lump sum withdrawals, or of further capital gains tax hikes.
“The recent period of policy uncertainty has clearly unsettled investors and, in some cases, prompted reactive decisions they may later regret. Savers benefit most from clarity and consistency, so they can plan properly for long-term goals.”
Risk Aversion Surges Despite Market Highs
Risk aversion is also part of the story. Safe-haven money-market funds saw inflows of £1.25bn, beating the previous record set in October 2025 (£955m). In addition, inflows to fixed income funds remained elevated at £643m. Corporate and high-yield bond funds absorbed most of this capital; investors steered clear of sovereign bond funds.
Edward Glyn added: “A strong US earnings season was positively received by the markets, which were further buoyed by renewed bets on a near-term interest-rate cut. The US and global stock indices closed November near record highs. Yet investors are clearly nervous. It’s hard to disentangle Budget jitters from nerves about equity valuations, but the inflows to safe-haven money-market funds do indicate rising risk aversion.”
