Technology funds suffered a “notable” hit during the market sell-off last month as investor concerns about the impact of artificial intelligence drove the ninth consecutive month of outflows from equity funds.

Equity funds were hit with outflows of £927 million in February, bringing the total withdrawn since June last year to £12.2 billion, according to Calastone, the global funds network. It said specialist technology funds were “notable losers” last month as they saw net outflows of £162 million, equivalent to a sixth of the total withdrawals.

The technology sector was one of many industries affected by the release of new tools by Anthropic, the AI developer, which prompted traders to speculate on industries and companies that will be hardest hit by the emergence of new, well-funded American software giants. Sage, the London Stock Exchange Group, Experian and Pearson were just a few of the companies on the FTSE 100 that were caught up in the sell-off, an acceleration of stock market trends that had started to take hold during the second half of last year.

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Losses were most significant in UK equity funds, which saw withdrawals of £555 million, while global funds were also hit, with outflows of £518 million. Specialist sector funds, which include technology investors, saw outflows of £284 million.

Edward Glyn, head of global markets at Calastone, said investors were “looking for reasons to pull money out of funds”, adding: “Certainly, February was a very volatile month for global share prices as successive waves of panic about which sectors will see their business models disrupted by AI swept through stock markets. But we are not in a bear market, even if some pockets of the market are being punished.” 

Funds regarded as relatively safe were favoured by investors, as fixed income funds and multi-asset funds saw inflows of £453 million and £1.47 billion. Property funds also saw some signs of recovery, as they saw outflows of £19.6 million, which was the lowest level since August and the best month for the sector in three years. Glyn attributed the performance to the settling of interest rate expectations in February, although recent market gyrations have cast doubt on the path for borrowing costs in 2026.

Active equity funds continued to see outflows as investors sold holdings worth £1.5 billion, making it the 14th month of outflows in a row. Meanwhile, passive funds benefited from inflows of £571 million. Passive funds have not seen redemptions since August 2023.

Glyn said: “Actively managed funds are bearing the brunt of the selling. Active equity funds tend to attract investors who are making a choice. They are selecting a manager, a style, a thesis. That often comes with higher engagement, more switching, and a willingness to react when the news shifts. This may explain why they are always first under the hammer.”