April saw the strongest retail fund inflows of the year so far, despite heightened geopolitical uncertainty.
UK retail investors placed a net £1.1 billion into funds in April, marking a second consecutive month of fund inflows, according to the latest data from the Investment Association.
Equity funds dominated the landscape with strong net retail sales of £962 million, as investors embraced a risk-on approach. Despite ‘Liberation Day’ fuelling a month of rapidly evolving tariff negotiations, North American equities continued to lead demand with inflows of £948 million. Globally diversified equities also saw a similar boost with inflows of £872 million.
The data showed inflows to North America were split, with £615 million to actively managed funds and £463 million to index trackers.
However, the impact of the Trump administration has been felt in emerging markets, with continued outflows of £296 million from Asian equities.
UK equity funds also saw continued outflows of £817 million in April but easing slightly from £1.2 billion in March.
While some investors embraced risk, the Investment Association said a significant portion remain cautious. Inflows to money market funds were the highest of any asset class in April at £1.1 billion, following £1.3 billion in March. European equities also saw a second consecutive month of inflows of £106 million as investors looked to diversify their portfolio.
The Investment Association said March and April net sales are also traditionally boosted by ISA season, as investors make the most of the changing tax year and new contribution allowances.
Miranda Seath, director, market insight and fund sectors at the Investment Association, said: “A second consecutive month of net fund inflows suggests that investors do retain a degree of confidence, even as global economic uncertainty continues.
“Whilst part of the pickup in flows is seasonal – many people have been making the most of their £20,000 ISA allowance before the 5 April tax-year deadline – we are also seeing genuine momentum in the markets. Notably, those willing to take on more risk have been investing in North American equities, buying the dip as valuations have fallen. This helped to give April’s inflows an extra boost.”
Seath said investor behaviour was increasingly split into two camps. Investors with a risk-on approach are putting their money into North American equities, while more cautious investors are favouring diversification away from US stocks into Europe and moving funds into lower-risk vehicles such as money market funds.
Seath added: “Looking ahead, the outlook for global markets will remain unclear as long as uncertainty hangs over the economy and tariff policy remains changeable. If tariff threats do push up prices, central banks may delay cutting interest rates. That kind of scenario could mean that market turbulence persists.
“Closer to home, though, the recent UK-EU trade agreement is a promising development. The EU remains the UK’s biggest trading partner and our trade relationship is now on a firmer footing. It could open up selective opportunities for investors interested in UK assets.”
Victoria Hasler, head of fund research at Hargreaves Lansdown, said: “Investors flocked to funds in April, making it the biggest month of 2025. Compared to April 2024, however, the picture was somewhat gloomier, with only around a third as much invested in funds overall. Investors paid £1.1 billion into funds in April 2025, compared to £3.2 billion a year earlier.
“Among Hargreaves Lansdown’s clients, passive funds remain a popular option, with all but one of the top 10 funds being passively managed. The majority of these are focussed on the US and global markets, although a European tracker fund snuck in at number eight on the list. Income funds, on the whole, tend to be a little more defensive than the wider market and that, combined with this fund’s value bias, could be what attracted investors.”
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