Investors withdraw £4.5bn from funds in October as Budget uncertainty peaks
Kate Marshall, lead investment analyst, Hargreaves Lansdown: “UK retail investors pulled a net £4.5bn from funds in October, according to the latest Investment Association data. This marks the weakest month since October 2024 and reflects a clear rise in caution as speculation around the Autumn Budget intensified.
Equity funds saw the largest impact, with £5.0bn withdrawn across all major regions. Global equities suffered the heaviest redemptions at £2.5bn, while UK equity outflows accelerated to £1.4bn. Sentiment also turned in North America, where concerns over stretched valuations in US mega-cap technology stocks and fears of an ‘AI bubble’ contributed to £649m in withdrawals. Technology-focused funds recorded their biggest-ever monthly outflow of £322m.
Flows into bond funds were broadly flat at -£2m. Investors favoured Strategic Bond, Corporate Bond and Global Emerging Markets Local Currency funds, but this was outweighed by selling in developed-market government bonds. UK Gilt and Government Bond sectors saw a combined £548m in outflows partly due to uncertainty about the trajectory of Bank of England rate cuts.
Mixed asset funds experienced their first outflows in a year, with £51m withdrawn. Money market funds, which have been in demand throughout much of 2025, were broadly stable with marginal inflows of £1m. Tracker funds also saw muted appetite, recording modest inflows of £306 million.
Overall, October’s figures highlight how uncertainty over potential tax changes can influence investor behaviour. With the Budget now delivered, clarity may help stabilise conditions, although the cumulative impact of fiscal drag and targeted tax increases could continue to weigh on long-term planning.
HL data shows that the US and global sectors continued to dominate the list of most bought funds, though a Money Market fund made a return to the list amid the uncertainty. The balance remains tilted towards passive funds overall.
The most bought investment trusts are more diverse, although a few global equity trusts make an appearance. Income remains a popular theme, with investors taking advantage of attractive yields during an uncertain period for markets. Several renewable energy trusts also remain on the list – these trusts continue to sit on significant discounts, enhancing their appeal to investors.”
HL data
| Top Funds, October (HL clients, net buys) |
| Artemis Global Income |
| Vanguard FTSE Global All Cap Index |
| Fidelity Index World |
| UBS S&P 500 Index |
| Legal & General Global Technology Index Trust |
| HSBC FTSE All World Index |
| Legal & General International Index Trust |
| Vanguard LifeStrategy 100% Equity |
| Royal London Short Term Money Market |
| Fidelity S&P 500 Index |
| Top Investment Trusts, October (HL clients, net buys) |
| Scottish Mortgage Investment Trust plc |
| City Of London Investment Trust |
| F&C Investment Trust plc |
| Greencoat UK Wind plc |
| Henderson Far East Income Ltd |
| Alliance Witan plc |
| Temple Bar Investment Trust plc |
| NextEnergy Solar Fund Ltd |
| Octopus Renewables Infrastructure Trust plc |
| International Public Partnerships Limited |