Overall net retail inflows were high despite a slowing in investor activity in May.
The latest data from the Investment Association showed net retail sales recorded inflows of £2.5bn in the month, the highest figure in the past year.
It also marks seven consecutive months of inflows.
Looking under the bonnet reveals that gross money coming into investments fell to the lowest levels since January.
However, the amount UK investors were redeeming also fell, meaning that overall net inflows were high even as investor activity slowed across the month.
Miranda Seath, director for market insight and fund sectors at the Investment Association, said: “Despite a complex global backdrop and market uncertainty, UK investors continued to remain invested. May marked the seventh month in a row that money flowed into retail funds, with net inflows reaching £2.5bn — the strongest monthly total for a year.
“While people were slightly less active overall after the Isa season, the data suggests they are not turning away from investing.”
The data shows investors are making “considered choices” about where to put their money with demand for fixed-income, mixed-bond and volatility-managed funds.
In May, investor demand was strongest for fixed income, which saw inflows of £1.5bn, up from £465mn in the previous month.
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While mixed bond funds were the top-selling sector in the month, attracting £626mn, a record.
Coming in third was volatility-managed strategies which saw inflows of £433mn in May.
The top three sectors were followed by technology and innovation and corporate bonds.
Seath added: “Periods of geopolitical and economic uncertainty can understandably make investors cautious, but recent market reactions have been relatively shortlived compared with the volatility seen in 2022.
“Equity funds remain under pressure, but outflows are not at the levels seen in previous periods of stress.”
A recent poll from the IA showed 38 per cent of investors said they had a higher overall level of caution when investing compared to six months ago in response to the Middle East conflict.
In April, 28 per cent of those polled by the IA cited market turbulence as a reason to invest less in 2026/27, up 15 per cent when compared with March.
tara.o’connor@ft.com
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