Outflows from retail funds accelerated to £2.5bn in February, according to data published today by the Investment Association trade body.

January saw £1.2bn of retail fund outflows.

Fixed income funds saw outflows of £2.4bn as bond investors responded to rapidly rising inflation.

North America was the best-selling Investment Association sector in February with inflows of £570m.

Tracker fund inflows doubled in February, reaching £1.3bn, up from £672m in January.

Responsible investment funds saw net retail inflows of £670m.

Chris Cummings, chief executive of the Investment Association, said: “High inflation and growing economic uncertainty provided an uncomfortable backdrop for escalating tensions between Russia and Ukraine throughout February. Russia’s invasion of Ukraine contributed to already strong market turbulence, which saw £2.5 billion of retail savings flowing out of funds in February.

“Outflows from equity funds calmed in comparison to January, with investors instead focusing on taking money out of bond funds as inflation continued to rise. The full economic impact, including the long-term market impacts of western sanctions and supply chain disruption, will only become clear in the months ahead.”

The worst-selling Investment Association sector in February was UK All Companies, which experienced outflows of £503m.

In February, gross retail sales for UK fund platforms totalled £13.3bn, representing a market share of 52.7%. 

Gross retail sales through other UK Intermediaries, including Financial Planners, were £6.6bn, representing a market share of 26.2%. 

Direct gross retail sales in February were £1bn, representing a market share of 4.1%.