Fund inflows hit a six-month high in November – where are investors putting their money?

Fund inflows are on the rise but investors remain cautious and are seeking value, industry data shows.

Investors have had a tough time navigating financial markets in recent months with concerns about Autumn Budget tax rises as well as speculation about an AI bubble.

This uncertainty meant investors were cagey about putting too much money into funds for much of the second half of 2025 but there appears to have been a turnaround in November.

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Investors placed £530 million into funds in November, the strongest month since May 2025, new figures from the Investment Association (IA) show.

The inflows coincided with the 2025 Autumn Budget but are a marked improvement on 2024’s fiscal update, which saw substantial outflows of £5.7 billion during October.

This suggests concerns around potential tax changes including restrictions to pension tax free lump sums that never materialised in the Budget had subsided, the IA claims.

But investors still appear cautious, with consistent outflows across equities, as withdrawals totalled £2.9 billion, while money market and fixed income funds remain in favour.

Domestically, funds investing in UK equities recorded the smallest outflows since May 2025 at £453 million against the backdrop of the FTSE 100 Index closing 2025 at record highs.

Tracker funds saw relatively low inflows of £233 million, while active funds recorded their highest inflow in six months at £297 million.

Miranda Seath, director, market insight and fund sectors at the IA, said: “November’s data signals a notable shift in investor sentiment, with funds returning to inflows for the first time in six months, as anticipation ahead of the Autumn Budget helped investors to piece together the likely tax changes ahead of November 26th.

Here is where investors are putting their money.

The most popular fund sectors

Money market funds saw inflows of £1.4 billion during November 2025.

The Short Term Money Market sector was the best-selling IA sector in November with inflows of £1.3 billion.

Seath suggested that the high inflow to short-term money market funds reflected expectations from retail investors that the cash ISA limit would be reduced.

Mixed asset funds also attracted £659 million in November, their biggest monthly inflow since April 2025.

Equity funds remain in the red, but UK outflows slow

Equity outflows slowed in November to £2.9 billion, according to the IA’s data.

The figure is down from outflows of £5 billion in October 2025.

However, all regions continued to record outflows from equity funds.

Investors took £943 million out of global funds and £640 million from North America, reflecting concerns about artificial intelligence (AI) and technology stock valuations.

This is still an improvement on October’s data though when outflows from global and North America funds reached £2.4 billion and £859 million respectively.

Continuing uncertainty over US trade tariffs saw £401 million of outflows from Asia-focused funds, but sentiment towards UK equities showed signs of stabilisation.

The IA figures show the region recorded its smallest outflows since May at £453 million.

The IA said: “This stands out against a backdrop of persistent risk-off behaviour and ongoing outflows from global equities, suggesting that investors may be reassessing the UK market’s prospects and reflect a growing recognition among retail investors of the UK’s value proposition."

It comes as the FTSE 100 closed 2025 with a 26% gain.

In contrast, the S&P 500 returned 10% in sterling terms over 2025, which may be helping to draw investor attention to UK equities.

The IA said: “The FTSE’s strong performance appears to have positioned the UK as an increasingly attractive alternative to the US, particularly as concerns mount over valuation bubbles and concentration risk in major American technology firms.

“UK stocks are seen as good value with more room to grow, in contrast to some US market stocks where valuations are very high, leading to concerns about an AI-driven bubble and a US market correction. Investing in the UK is also a good way of diversifying away from the US and managing equity risk in portfolios and UK investors may be waking up to this after favouring European stocks earlier in the year.”

Diversification for fixed income sectors

Investors returned to fixed income in November 2025 with inflows of £1.1 billion compared with outflows of £62 million a month before.

Inflows were led by £360 million going into the Mixed Bond sector, £262 million into Strategic Bond and £117 million into UK Gilts.

Outflows from government bonds also eased to £11 million, the IA said.

The Global Emerging Market Bond sector also marked its seventh consecutive month of inflows, attracting £100 million in November.

The IA said this suggests investors are looking to diversify beyond traditional developed markets and reflects a drive to diversify away from US dollar assets.

The trade body added: “This resurgence reflects a growing appetite for diversification across the asset class, as retail investors sought to balance risk across a range of fixed income sectors.”

Seath said: “As we enter the new year, 2026 has so far been marked by the US deposition of Nicolas Maduro in Venezuela, a country with significant oil reserves.

“Even as immediate market reactions, particularly in oil, have been relatively contained, in this environment of growing uncertainty over the geopolitical ramifications of the US’ actions, households and savers are likely to continue favouring‑ a cautious approach. Diversified allocations over the long-term can look through near-term volatility as market and political dynamics evolve.”