Investors pulled a net £858m from equity funds in September, the 15th month of outflows in the past 16, as higher bond yields drew money into fixed income and cash, Calastone's latest Fund Flow Index has shown.
UK-focused funds made up £708m of the total. They have now seen net selling in 63 of the past 65 months, with £47.7bn withdrawn over that period. Equity funds as a whole have lost £5.5bn so far this year.
Edward Glyn, head of global markets at Calastone, said: "Investors are nervous and this is making them very picky. Equities overall remain firmly out of favour, particularly UK stocks, despite relatively resilient market performance.
“High share prices, surging bond yields and significant geopolitical and inflation concerns mean investors have plenty of reasons to question how much equity risk they want to carry."
Investors pulled a net £124m from North American equity funds, their largest outflow since November 2025. Some £371m was removed from Asian equity funds, their second-worst month on record. European, Japanese, Chinese and sector-focused funds also saw net selling.
Global equity funds took in £410m and emerging-market funds £133m.
Bond funds drew £655m in September and £3.5bn so far this year. High-yield funds, which lend to companies with lower credit ratings in return for higher income, added £421m.
Over the past two years, they have attracted £3.2bn of net purchases, 46% of all bond inflows. Funds investing in government debt took in £116m despite a turbulent period in government bond markets.
"September's global bond upheaval has a range of causes: rising energy prices and therefore inflation fears, weak government finances and competition from corporate borrowers,” Glyn said.
“The resulting higher yields mean losses for existing bondholders but also increase the income available to investors buying at today's prices, making bonds more attractive to new money."
Money market funds, which hold cash-like short-term loans, attracted £417m, their largest inflow since November 2025. Together with bond funds, they received £1.1bn, slightly more than equity funds lost.
Investors can currently earn a meaningful return on cash without any duration or equity-market risk. “It is a safe haven,” said Glyn.
Finally, this month's Budget is also likely to be a factor in driving rising outflows from equities, as speculation about higher taxes means some investors will be taking profits now.