Investors withdrew £640mn from equity funds in January, the latest Calastone Fund Flow Index shows.
It was the second time since late 2023 that outflows were recorded.
UK-focused equity funds were hit the hardest with £1.07bn leaving, the sixth worst month on record.
Edward Glyn, head of global markets at Calastone said: “UK fund investors seem to have given the government’s fretful growth narrative a clear thumbs down.
“The UK stock market reached all-time highs in January, but investors merely took this as an opportunity to get out while the going was good.
“Meanwhile, political instability and increasing anxiety about the economy have put Europe back on the sell list after a strong 2024 for inflows driven by rising share prices.”
Elsewhere, fixed income funds saw inflows fall by two thirds month-on-month to £267m, with sovereign bond funds seeing the biggest drop in interest – inflows fell by almost 90 per cent to £41mn.
Glyn said that as bond markets saw yields surge at the start of 2025, investors turned to the assets.
He added: “Investors bought into this market decline in the first half of the month – enabling new capital to lock into these ultra-high yields, before turning net sellers as calm returned. This is a pattern we often see in the millions of trades Calastone processes every month.”
tara.o’connor@ft.com
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