Chris Cummings, chief executive of the IA, said market turmoil following the 23 September Mini Budget contributed to investors pulling their money.

Only in March 2020, at the start of the Covid pandemic, have outflows been higher at £9.7bn.

Refinitiv: UK funds suffer largest outflows on record in September

The September figures mark the eighth month of net retail outflows this year. Equity funds were the worst hit - investors pulled out almost £5bn, the highest monthly outflow on record, driven by outflows from global equities of £2bn. 

UK equity funds saw outflows of £1.3bn, however the worst-selling IA sector in September was Global, which experienced outflows of £2bn.  

UK gilts was the best-selling IA sector this month, with net retail sales of £412m, while UK Index Linked Gilts was second, with inflows of £202m.

Explaining the data, Cummings said: "Despite the historic rise in UK gilt yields following the Mini Budget, which caused gilt prices to plummet, some investors saw opportunity amid the turbulence."

Responsible investment funds were also affected by outflows of £211m, the first time since February 2021. 

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Tracker funds saw modest outflows of £264m, only the second monthly outflow in 2022, while fixed income funds and mixed asset funds recorded outflows of £612m and £785m respectively.

Cummings said outflows from equity funds have also been increasing month on month, "as economies globally continue to slow and central banks maintain their cycle of rate hikes".

He added: "We have seen outflows from funds in eight of the first nine months of 2022, and while volatile markets can provide opportunities, investors are still waiting for a period of relative market and economic stability."