UK investors poured a record-breaking £27.2 billion ($34 billion) into stock holdings in 2024, according to funds network Calastone. The surge in investments was largely driven by increased

inflows into index-tracker funds.

The total net inflows into equities surpassed the previous high of £19.8 billion recorded in 2021, marking a significant milestone in Calastone’s decade-long dataset. The sharp rise was attributed to the growing popularity of passive investment products, which saw inflows more than triple from £8 billion in 2023.

Index-tracking products offered by major U.S. asset managers such as BlackRock and Vanguard have continued to disrupt the traditional investment landscape. The shift toward passive investing has intensified competition, putting pressure on mid-sized firms focused on actively managed strategies.

In 2024, passive investment products attracted £29.6 billion in inflows, surpassing the total inflows of the previous four years combined. Conversely, actively managed funds recorded outflows of £2.4 billion during the same period.

Global equity funds emerged as the top choice for investors, generating £19.5 billion in inflows. Of this, North American funds accounted for £11.9 billion, benefiting from the strong performance of U.S. markets.

Meanwhile, UK-focused equity funds continued their losing streak, experiencing a ninth consecutive year of outflows, with £9.6 billion withdrawn in 2024.

Fixed income funds faced a challenging year, with inflows dropping sharply to £1.3 billion from £7.7 billion in 2023. Weaker bond markets over the summer dampened investor appetite for fixed income products.

Despite the mixed performance across asset classes, investors closed the year on a positive note, adding £2.9 billion to equity funds in December, along with £867 million to fixed income funds.