Two thirds (65.8 per cent) of UK fund groups reported onshore net retail sales growth in the second quarter of 2025, the latest Pridham Report has revealed.

Despite the positive performance in net flows for most fund groups, gross sales remained flat compared to the previous quarter.

The report, by ISS Market Intelligence (MI), said that hesitancy remained among investors, advisers, and asset allocators on how to position portfolios in the current landscape.

Fund flows were driven by equities in the second quarter, as gross sales increased by 2.7 per cent quarter-on-quarter, with North American equities being the primary driver.

Meanwhile, onshore fixed income saw a more than 10 per cent fall in gross sales in Q2 2025.

ISS IM noted that fixed income sales continued to be in a holding pattern amid uncertainty over the future of rates.

BlackRock saw the largest volume of gross onshore net retail sales in the quarter with £9bn, followed by Vanguard (£7.4bn) and Legal & General Asset Management (£6.6bn).

Fidelity’s sales were at record levels for its quarterly onshore retail sales, reaching £6bn in Q2, while it led the industry for onshore retail net sales at £1.29bn due to strong flows across several asset classes and both active and passive strategies.

HSBC Asset Management reported the second highest net sales with £1.24bn, followed by Vanguard (£1.16bn) and Artemis (£825m).

“Our flows data for the second quarter reveals that tariff anxiety did not break the sales momentum that has been building in 2025,” commented ISS MI head of research development, EMEA & North America, Benjamin Reed-Hurwitz.

“Despite a small dip in gross sales, net flows turned positive as cooling geopolitical tensions meant that many portfolio decision makers felt being in the market was a better option than staying on the sidelines at the current time.

“That said, this recovery still has a fragile feel to it. We believe that confidence is growing, but it’s being built against a backdrop of unpredictable geopolitical flashpoints and fiscal risks.

“The investment mood appears to be more optimistic than it has been, but it seems like it wouldn’t take much to knock things off course.”

Reed-Hurwitz noted improvements in active and passive fund sales in Q2, with market volatility creating new opportunities and renewed momentum for active managers.

“Interestingly, the continued growth of passive investing is opening the door for alpha-focused strategies to shine,” he continued.

“With more investors gaining low-cost access to broad market exposure, the role of active managers in delivering diversification and uncorrelated returns is becoming even more important.”

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