UK passive funds capture 70% of Q2 net inflows as active flows slump
Passive funds captured more than 70% of net fund inflows on UK platforms during the second quarter of 2026, as advisers and investors sought low-cost index tracking.
According to new data from distribution intelligence platform Finscape, UK funds gathered £4.6bn in net inflows across Q2.
Passive strategies dominated the allocations, bringing in £3.2bn, while active funds attracted £1.4bn over the three-month period.
The preference for index tracking was particularly pronounced in June, which Finscape described as “belonging to passive almost entirely”.
Of the £1.8bn in total net inflows recorded during the month, passive vehicles secured £1.7bn. Active strategies saw a trickle of £45m in net flows, as higher redemptions offset £10.3bn in gross sales.
Over the full quarter, passive strategies accounted for 70.4% of net platform flows, despite holding just 34.3% of total assets under management (£194.4bn out of £565.9bn total AUM).
Active funds continue to represent the majority of overall assets at 65.7% (£371.5bn).
| On-Platform Activity | Total AUM (30 Jun) | Q2 Gross Flows | Q2 Net Flows | Q2 Net Market Share |
| All Funds | £565,918m | £55,380m | £4,555m | 100.0% |
| Active Only | £371,539m | £32,799m | £1,350m | 29.6% |
| Passive Only | £194,380m | £22,581m | £3,205m | 70.4% |
James Klempster: The active approach to passives
The index majors continued to lead gross activity across both June and the overall quarter, with Vanguard, BlackRock and Legal & General Investment Management (LGIM) topping the gross sales leaderboards.
When looking at total net flows across all fund types, BlackRock took the top spot for Q2 with £1.46bn, followed by Amundi (£938m) and Quilter (£790m).
In the active-only space, Quilter led both June (£479m) and Q2 (£732m) net sales. Other active managers attracting sustained inflows included YOU Asset Management (£371m net in Q2), HSBC (£366m), and Orbis (£314m).
Finscape noted that successful active managers generally exhibited a defensive orientation, benefiting from demand for fixed income, multi-asset and global equity income strategies amid rising bond yields and broader volatility.
| Top 5 Managers (Q2 Net Flows) | All Funds (£m) | Active Only (£m) |
| 1 | BlackRock (£1,461m) | Quilter (£732m) |
| 2 | Amundi (£938m) | YOU Asset Management (£371m) |
| 3 | Quilter (£790m) | HSBC (£366m) |
| 4 | LGIM (£581m) | Orbis (£314m) |
| 5 | YOU Asset Management (£371m) | Schroders (£286m) |
The Q2 flows played out against macro friction, including Middle East conflicts, elevated gilt yields, and shifting UK political leadership.
Bella Caridade-Ferreira, head of insight at FE fundinfo and Finscape lead, commented: “There was a lot of geopolitical and domestic noise in the second quarter, with the World Cup and other sporting events adding some colour and hope.
“Unfortunately, football didn’t come home, but with Andy Burnham taking over as UK Plc’s manager, it will be interesting to see whether investment trends remain the same or are substituted in the second half of the year.”
