Bond funds post third-strongest month as investors exit stocks

Calastone’s Fund Flow Index shows bond funds drew £1.06bn of net inflows in June, the third-strongest monthly total on record. Equity funds recorded £437m of net outflows in the month, while multi-asset funds attracted £1.97bn and money market funds logged £215m of inflows.

Within equities, global and North American funds posted inflows in June. Asia-Pacific equity funds recorded £312m of outflows, marking a 38th consecutive month of redemptions for the region. UK-focused equity funds lost £260m in the month.

For the first half of 2026, bond funds attracted £2.29bn of net inflows. Equity funds experienced £2.67bn of net outflows across January–June, while multi-asset funds recorded a six-month record of £11.9bn of inflows.

Calastone cited higher yields in fixed income markets, expectations of later interest-rate cuts by central banks, and ongoing geopolitical and economic uncertainty as factors supporting demand for income-generating and diversified funds.

Edward Glyn, head of global markets at Calastone, commented: “Investors are becoming more selective in their risk-taking, favoring balanced portfolios that combine growth potential with greater resilience. Attractive bond yields, the prospect of lower interest rates and ongoing geopolitical and economic uncertainty are driving demand for fixed income and diversified investment strategies.”