North American funds saw £622m in outflows in May, according to the latest data from the Investment Association.

The outflows, following the US tariff announcements, included a record £303m withdrawn from funds investing in smaller US companies.

May’s outflows were a reverse from April’s £962m of inflows into the sector and the first outflows in six months.

The Investment Association attributed the falls to a “significant shift in sentiment” due to uncertainty over the impact of US policy and tariffs.

A record monthly outflow of £525m from the global emerging market sector reinforced a view that investors are reducing exposure to regions that may be adversely affected by the impact of the introduction of tariffs. This was a steep rise from the £62m of outflows reported for April.

Miranda Seath, director of market insight and fund sectors at the Investment Association, said: “May marked a clear inflection point in investor sentiment and portfolio positioning, as capital shifted away from US and emerging market equities in response to intensifying global trade uncertainty and increased geopolitical risk. Having bought the dip in US markets in April, investors stepped back from US exposure in May, opting for globally diversified funds to help mitigate risk.”

Across all sectors, UK investors placed £2bn into funds in May, up from £1.1bn in April.

The five best-selling Investment Association sectors for May 2025 were:  

1. Global with net retail sales of £719m
2. Short Term Money Market with net retail sales of £631m
3. Europe Excluding UK with net retail sales of £456m
4. UK Gilts with net retail sales of £453m
5. Volatility Managed with £409m

Tracker funds saw a net retail inflow of £1.9bn, while active funds saw a modest inflow of £142m. Tracker funds overall share of industry funds under management in May was 25%.

Fixed income fund sales rebounded with £1.1bn inflows, led by gilt funds which reported £453m of inflows.

Equity funds saw net retail outflows of £564m, following strong inflows in April. However, UK equity funds saw outflows reduce to £348m, the strongest month for the sector since August 2021.