Investors are continuing to put money into financial markets even amid the economic uncertainty caused by the Iran war with money flipping between active and passive strategies, figures show.
The Middle East conflict may be threatening to push up inflation and cause a recession but investors remain undeterred.
Figures from fund data company Lipper show net inflows for March 2026 were £1.11 billion, up from the previous month’s £149 million.
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Investors are favouring passive over active strategies particularly when it comes to equities, helped by stock markets reaching record highs in recent weeks.
The Lipper data shows that passive flows were positive in March, up by £2.23 billion, while active funds saw redemptions of £1.12 billion. See our separate article on the most popular funds, stocks and trusts for DIY investors.
Despite overall negative flows, equity funds were the primary driver of passive demand, attracting £1.47 billion, with many turning to well-known asset managers to oversee their portfolio.
Here are the asset managers that investors are trusting with their money and the most popular assets.
The most popular asset managers
Perhaps unsurprisingly given the popularity of passive funds, Vanguard led asset manager flows year-to-date in March.
The brand attracted £3.01 billion from investors, driven primarily by 2.52 billion of equity allocations alongside contributions from mixed-assets and money market funds.
Royal London follows closely with £2.95 billion of inflows, supported by £2.49 billion of money going into equities and £1.82 billion of money market demand. This offset bond outflows of £1.09 billion.
Amundi ranks third with £2.44 billon. Its inflows concentrated in equities, with £1.45 billion of new money.
Schroders recorded £2.09 billion of inflows, mainly from mixed-asset allocation, according to the report.
Where are investors putting their money?
Mixed-assets funds were the clear winners during March, Lipper said, attracting £2.75 billion. Most of this has gone into active funds.
In contrast, equity flows remained firmly negative, with £2.79 billion of net outflows. Active equity funds shed £4.26 billion during while passive vehicles attracted £1.47 billion, according to the Lipper research.
Bond flows were marginally negative, with £16m of net outflows.
This was made up of £388 million into active funds more than offset by £404 million of passive redemptions.
Broken down by fund sector, Mixed Asset GBP Aggressive – Global led flows in March, attracting £3.04 billon.
Equity Europe ex UK followed with inflows of £1.83 billion, which Lipper said was driven by active demand.
Money Market EUR also saw strong buying interest at £0.71 billion, entirely via passive vehicles.
The report suggests this is “something of an oddity”, as euro money market funds don’t normally appear in UK investors’ shopping baskets.
Conversely, Money Market GBP suffered redemptions of £0.59 billion, almost entirely from active funds.
Fixed income exposures were mixed. Bond Global GBP gathered £0.65 billon, supported by active inflows of £1.15 billion despite passive redemptions of £0.50 billion.
Similarly, Bond Global Corporates USD added £0.47 billion, with flows skewed towards passive products.
Bond JPY also featured among the top gainers, with £0.38 billion entirely passive. Emerging market equities continued to attract capital, with Equity Emerging Markets Global taking in £0.55 billion, driven by active strategies.
The classification was the second-most popular in January, and fourth in February. On the negative side, Equity Global saw the largest redemptions at £2.72 billion, reflecting heavy active outflows of £3.61 billion.
Bond Global Corporates GBP also experienced substantial outflows of £1.24 billion, with both active and passive components contributing to the drop.
UK-focused equities remained under pressure, with Equity UK seeing £0.54 billion of outflows, while Equity UK Small & Mid Cap lost £0.35 billion. Equity Asia Pacific ex Japan also saw withdrawals of £0.51 billion, despite the decent performance of this market of the medium term.
Lipper highlights that the market doesn’t seem able to make its mind up whether it prefers passive or active fixed income at the moment, as February was strongly active-to-passive and January was the reverse.
The flipping between active and passive strategies may reflect uncertainty caused by the Iran conflict and other geopolitical tensions.
Andrew Prosser, head of investments at InvestEngine said: “In times like this it’s easy to get spooked by a few big market falls, but it’s important to stay focused on the long term. While your portfolio might take some knocks now, these movements become much less relevant over five, ten, or twenty years. History shows that investments are far more likely to grow over the long term, and sometimes the best days follow the very worst.
“Think back to April last year — within a week of ‘Liberation Day’ markets rallied, with US stocks climbing 9.5%, the biggest daily gain since the 2008 financial crisis. While volatility persisted, the US then had its best May since 1990, with the FTSE 100 and other global markets following.
“This highlights the value of patience: sometimes the smartest move is to simply sit on your hands and focus on your time horizon.”
He suggests regular investing, can help smooth out market ups and downs via pound-cost averaging, adding: “It’s also crucial to think about diversification and risk. Holding a mix of stocks, bonds, gold, and cash across different sectors and geographies ensures your portfolio isn’t overly exposed to any one shock.
“Your allocation should also reflect your risk tolerance and how far you are from your financial goals, for example, someone closer to retirement may want more stability, while longer-term investors can afford to take more risk.”
