The funds industry is feeling the effect of the ongoing conflict in the Middle East according to a number of reports showing high levels of outflows and drops in performance.
A report from a JP Morgan analyst stated that hedge funds have suffered the biggest outflows in almost a year, when President Trump imposed tariffs on global trade in April 2025.
“Since the start of the conflict, hedge funds have experienced their worst drawdowns since [the introduction of tariffs],” wrote JP Morgan’s global markets strategist Nikolaos Panigirtzoglou.
In addition, the MSCI Global Index has fallen by more than 3% cumulatively since the war in Iran began on February 28.
And data from LSEG Lipper, showed that global equity funds saw just over $7 billion in outflows between March 5-11, the largest withdrawals so far in 2026.
Meanwhile, data from FEfundinfo shows that less than 5% of UK-domiciled funds have made a positive return since February 28 and the outbreak of war.
According to FEfundinfo, just 249 of the 5,464 funds in the Investment Association universe made a positive return, equivalent to 4.6%.
