City of London Investment Group Q1 2026 Trading Update: FuM Dips 3% Amid Market Volatility

Q1 2026 snapshot: FuM slips 3% to $10.9bn as markets wobble, but mid‑April bounce helps

City of London Investment Group’s latest trading update is a classic mixed quarter. Funds under Management (FuM) dipped 3% to $10.9 billion as at 31 March 2026, reflecting a combination of modest net outflows and a tough March for markets. Management notes that FuM subsequently rose to $11.7 billion by 15 April, suggesting an early Q2 recovery in risk assets.

The figures are unaudited. Here is what moved the dial, where flows came from, and what matters next for investors.

Key numbers investors should know

Metric	Figure
FuM at 31 Dec 2025	$11.2 billion
Gross inflows (Q1)	$136 million
Gross outflows (Q1)	$(308) million
Net flows (Q1)	$(172) million
Market & investment performance (Q1)	$(180) million
FuM at 31 Mar 2026	$10.9 billion
FuM at 15 Apr 2026	$11.7 billion
Interim dividend	11 pence per share (paid 2 April 2026)

What drove the quarter: flows and performance in focus

CLIG reported net outflows of approximately $172 million, which management says were at a reduced rate compared with prior quarters. The reasons look familiar for an asset manager at this point in the cycle: client rebalancing, pension de‑risking, and cash needs.

Markets did the rest. Gains earlier in the quarter were more than offset by a sharp March drawdown and heightened volatility, taking $180 million off FuM through performance effects. That market hit was broadly similar in size to the net outflows, which is why the overall move is a modest 3% decline rather than anything more dramatic.

Strategy breakdown: CLIM and KIM at a glance

CLIM strategies: Emerging Markets and International Equity see outflows

Within the CLIM bucket, FuM moved from $7,134 million to $6,842 million across the quarter. The pattern was:

• Emerging Markets: $3,824m to $3,717m, with outflows of $(137)m and marginally positive performance (+$2m).
• International Equity: $2,576m to $2,450m, with inflows of $70m but outflows of $(100)m and a $(96)m performance drag.
• Opportunistic Value: steady at $316m, with $8m of net inflows offset by $(8)m performance.
• Listed Private Equity: $221m to $192m, entirely due to $(29)m performance.
• Other (includes Frontier and alternatives): $197m to $167m, reflecting $(15)m outflows and $(15)m performance.

In short, International Equity attracted gross inflows but still saw a net client pullback, and Emerging Markets remained the main area of outflow pressure. Performance headwinds were most visible in International Equity and Listed Private Equity as March volatility bit.

KIM strategies: steady flows, softer markets

KIM moved from $4,102 million to $4,042 million. The highlights:

• Growth Balanced: $1,448m to $1,413m, with flat flows and $(35)m performance.
• Conservative Balanced: $1,199m to $1,195m, with $(18)m net outflows partly offset by +$14m performance.
• Tax-Sensitive Fixed Income: $572m to $573m, with $1m net inflow and flat performance.
• Taxable Fixed Income: $701m to $672m, with $(10)m net outflows and $(19)m performance.
• Cash Management: $94m to $104m, flat flows and +$10m performance.
• Equities: $88m to $85m, with $1m net inflow and $(4)m performance.

KIM’s flows were modestly better, with $30 million of inflows led by Growth Balanced strategies, but overall FuM edged down due to performance. The resilience in Cash Management is what you would expect in a choppier quarter.

Why this update matters for shareholders

Outflows are easing, which is directionally positive

Management explicitly calls out that net outflows were at a reduced rate versus prior quarters. That matters because flow momentum is often a leading indicator for revenue stabilisation in asset management. It suggests client confidence is not deteriorating, even if some rebalancing continues.

Market sensitivity remains high, but early Q2 rebound helps

The $180 million performance drag shows how exposed FuM is to equity market swings. The stated rebound to $11.7 billion by 15 April is encouraging and implies that some of March’s drawdown has already unwound. If markets remain constructive, quarterly revenue run‑rates should benefit mechanically via higher average FuM.

Strategy mix: core equities face the push and pull of rebalancing

Outflows were concentrated in Emerging Markets and International Equity at CLIM and in Conservative Balanced at KIM. That is consistent with clients trimming risk or de‑risking pensions after strong prior periods. The counterpoint is that CLIG continues to cite strong relative performance supporting long‑term positioning and ongoing client engagement in core equity strategies. If performance leadership is sustained, sales pipelines should eventually follow, though no pipeline data is disclosed.

Dividend: income investors get paid while the cycle turns

The interim dividend of 11 pence per share was paid on 2 April 2026. No changes to dividend policy or guidance were disclosed. For income‑focused holders, cash returns remain intact through what is, for now, a period of modest net outflows and market noise.

My take: a workmanlike quarter with a helpful April kicker

This reads as a steadying update rather than an inflection point. The negatives are clear enough: $172 million of net outflows and $180 million of market drag, with pressure in Emerging Markets and International Equity. The positives are equally important: outflows slowed, there were selective inflows into International Equity and KIM strategies, and FuM recovered to $11.7 billion shortly after quarter‑end.

For the shares, the debate is simple. If markets stay firmer and relative performance remains strong, CLIG’s FuM and fee revenues have room to rebuild. If volatility persists, expect more quarter‑to‑quarter noise. On balance, this is a respectable holding pattern with improving flow trends, supported by a maintained dividend. I would watch three signposts into the next update: net flow direction in Emerging Markets and International Equity, the stickiness of KIM balanced mandates, and whether April’s recovery holds into quarter averages.

Segment detail: the moving parts in one place

Segment	Dec-25 FuM ($m)	Inflows	Outflows	Net flows	Market & performance	Mar-26 FuM ($m)
CLIM total	7,134	106	(252)	(146)	(146)	6,842
KIM total	4,102	30	(56)	(26)	(34)	4,042
Group total	11,236	136	(308)	(172)	(180)	10,884

Past performance is no guarantee of future results. Figures are unaudited and FuM numbers are rounded, as disclosed by the company.