UK retail net fund sales move back into positive territory

Strong net inflows into offshore strategies drove UK retail net fund sales back into positive territory in the second quarter of 2026, analysis from ISS Market Intelligence (MI) has shown.

Its latest Pridham Report found that retail net sales were nearly £5bn in the quarter, reversing the £4bn of outflows recorded in the first quarter, while total gross sales increased to more than £90bn.

This growth was experienced broadly across the sector, with 21 of the fund managers that supplied data for the report showing positive net sales in Q2.

"While the upward sales trend in the second quarter was positive, it was also encouraging to see the breadth of sales improvement across the market,” said ISS MI head of research development, EMEA & North America, and report author, Benjamin Reed-Hurwitz.

“With 21 groups recording positive net sales and 22 groups reporting improved net sales, this wasn't a quarter carried by a handful of names.

“The field of winners widened, and while the largest passive houses led the way, a good spread of active managers also enjoyed a strong quarter.”

Reed-Hurwitz noted that gross sales were 20 per cent higher in Q2 2026 then the same quarter in 2025.

“A key factor explaining this increased motion are changes in who is in control of the portfolio,” he continued.

“The growth in model portfolios is one such example. The preferences of today’s fund selectors are distinctly different from yesteryear’s fund selectors and as a result opportunity is moving to more vistas.

“Greater adoption of offshore funds, and the resulting rise in net sales for these funds, is case in point."

During the quarter, Vanguard reported record retail offshore net sales (£1.6bn), with passive fixed income highlighted as a major driver of offshore flows, ahead of HSBC Asset Management (£1bn) and T. Rowe Price (£862m).

Vanguard also experienced strong onshore retail net sales (£2.2bn), followed by L&G (£1.5bn), and HSBC Asset Management (£824m).

BlackRock recorded the highest onshore retail gross sales with £11bn, ahead of Vanguard (£9.9bn) and L&G (£8.1bn).

"Looking ahead, the question is whether this momentum carries into the third and fourth quarters,” Reed-Hurwitz said.

“For the past two years, we have seen strong second quarters only for the second half of the year to disappoint. And with continued economic and political uncertainty on both the global and domestic stages, investor sentiment may well turn as the year progresses."

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