Investors Pull £1.5bn from Equity Funds as Iran War Fears Shake Markets

A report by global funds network Calastone showed outflows from equity funds surged to £1.44bn in March from £927mln in February

Investors withdrew nearly £1.5 bn from equity funds in March as concerns over escalating tensions with Iran rattled global markets, according to new data from Calastone.

The report showed total outflows surged to £1.44 bn, up sharply from £927 mln in February, marking the largest monthly sell-off since November’s market turmoil ahead of Rachel Reeves’s Budget.

March’s withdrawals were the seventh worst on record and extended an unprecedented streak of ten consecutive months of outflows, highlighting persistent investor anxiety.

The sell-off was broad-based, with UK-focused funds hardest hit, losing £592 mln—slightly higher than February’s £555 mln. Meanwhile, the FTSE 100 fell nearly 7% over the month, reflecting wider market weakness.

Investor sentiment deteriorated most sharply in European, Asia-Pacific, emerging markets, and Japanese equities, the data showed.

North American funds were the only segment to attract inflows, but these dropped significantly to £99 mln from £371 mln in February, suggesting even traditionally resilient markets are losing appeal.

The latest figures underline growing caution among investors as geopolitical risks intensify and uncertainty continues to weigh on global financial markets.

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