Global volatility prompted investors to sell off £3.94bn of equity funds.
The market panic started at the beginning of 2025, according to research from behavioural finance experts Oxford Risk.
Analysis of Investment Association data showed the worst selling sector was UK All Companies.
Equity funds were the hardest hit with Money Market Funds seeing £1.262bn in net retail sales across the first three months of the year, while net retail sales of funds across all sectors were minus £2.96bn.
Mixed asset funds recorded positive net retail sales of £634mn in the period with all other sectors, including Isas and property, recording negative net retail sales.
James Pereira-Stubbs, chief client officer at Oxford Risk, said: “Retail investors have understandably been caught up in the market panic and the £3.94bn pulled out of equity funds shows that.
“Markets are likely to remain volatile for the foreseeable future as investors react to the latest news whether it is regarded as good or bad with the views often changing during the trading day.”
Pereira-Stubbs urged investors to remain focused on long-term financial plans rather than buy or sell based on macroeconomic news that can change very quickly.
Oxford Risk claims this type of “knee-jerk emotional reaction” to market swings cost investors an average of 3 per cent each year in returns and warns that losses could soar this year.
It said more recent volatility sparked by the US administration’s tariff policy is likely to have driven more selling.
Oxford Risk said the VIX index which measures volatility, hit 52.533 in early April — well beyond the 30 which is seen as high volatility.
tara.o’connor@ft.com
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