The second week of November ended with the reopening of America’s Federal government, further stock market volatility driven by angst about the valuations of major Artificial Intelligence (AI) plays, the freezing of France’s state pension reforms and US military forces concentrating around Venezuela.
Investors responded by adding to their AI exposure, taking year-to-date flows into all Bond Funds to the brink of a new annual record and lowering their expectations for consumer demand. Technology Sector Funds absorbed nearly $6 billion, with US-mandated funds posting their biggest inflow since the first week of April, while Consumer Goods Sector Funds saw over $1 billion flow out for the second week running.
When it came to risk appetite, the signals were decidedly mixed. Flows into Leveraged Equity Funds jumped to a 32-week high while redemptions from Bear Funds were the largest since mid-4Q24. Physical Gold Funds absorbed nearly $3 billion, High Yield Bond Funds attracted 0.008% of the AUM and Cryptocurrency Funds chalked up their fourth largest outflow of the year so far.
Overall, EPFR-tracked Equity Funds pulled in $18.2 billion and Bond Funds $18.7 billion during the week ending Nov. 12. Investors steered $1.3 billion into Balanced Funds, $1.5 billion into Alternative Funds and $7.7 billion into Money Market Funds.
At the asset class and single country fund levels, Nuclear & Uranium Funds posted their 14th consecutive inflow, Catastrophe Bond Funds tallied their biggest inflow since early May and Convertible Bond Funds experienced net redemptions for the seventh time over the past nine weeks. Investors pulled money out of Austria Equity Funds for the 18th time since the beginning of the third quarter, Sweden Bond Funds posted their biggest inflow in over three years, and Russia Money Market Funds absorbed fresh money for the sixth time quarter-to-date.
Emerging Markets Equity Funds
Despite the uncertainty about AI’s ability to deliver on all that has been promised of it, which has roiled American markets this month, flows to EPFR-tracked Emerging Markets Equity Funds during the second week of November favored those dedicated to markets – mainland China, Korea and Taiwan (POC) – viewed as leaders in this field. EMEA Equity Funds were the only major regional group to post an outflow during a week when US domiciled EM Equity Funds took in $4 for every $1 committed to ones based in Europe.
Although an AI or reform story remains the golden ticket for attracting inflows, markets offering exposure to rare earths, copper, lithium and major agricultural commodities have also been a pick-up. Latin America Equity Funds chalked up their biggest inflow since late 1Q22 as flows into Brazil, Latin America Regional and Chile Equity Funds hit five-week, 191-week and record highs, respectively.
Brazil’s investment case has been boosted in part by its success in adapting to the shifts in Sino-US trade. Recent research by EPFR’s sister company CEIC highlights what has happened with Chinese soybean imports.
“China is the world’s largest buyer of soybeans, which it primarily uses for animal feed…The decades-long boom in Chinese demand has reshaped Brazilian agriculture; it surpassed the US as the biggest producer of this crop in the 2010s,” note CEIC economists. “Comparing 2016 to 2024 shows just how profound this shift has been. The US share has shrunk from about 40% to less than 23%, contracting in absolute value terms. Brazilian exports have more than doubled in value terms; it now takes more than two-thirds of the Chinese market. (Argentina, the no. 3 producer, has lost considerable share to Brazil as well.)”
China Equity Funds recorded their seventh inflow over the past nine weeks, with funds dedicated to state-owned enterprises posting their sixth straight inflow. But Korea Equity Funds led the way among the Asia ex-Japan Country Fund groups, racking up their biggest inflow since mid-1Q21 as investors buy into a rally that has seen the country’s benchmark index climb over 60% this year. AI plays, tax and corporate governance reforms, hopes for a trade deal with the US and interest rates that have been on hold since May have fueled the Kospi’s rise.
There was a shift in the pattern of flows to EMEA Country Fund flows, with South Africa Equity Funds seeing inflows drop to a quarter of the previous week’s total, redemptions from Turkey Equity Funds jumping to a 16-week high and Saudi Arabia Equity Funds snapping their longest run of outflows since 3Q24.
Developed Markets Equity Funds
EPFR-tracked Developed Markets Equity Funds posted a collective inflow for the 38th time year-to-date during the week ending Nov. 12 as investors, who had to navigate swiftly changing expectations for both the year’s final US Federal Reserve policy meeting and the return on artificial intelligence (AI) investments, opted for funds with diversified and US mandates.
Japan Equity Funds were the only major group to record an outflow, with investors taking a more cautious stance towards technology stocks and waiting to see what the New Economic Plan being developed by the coalition government headed by Prime Minister Sanae Takaichi will determine. But retail flows were positive for the fifth time during the past seven weeks, and Leveraged Japan Equity Funds chalked up their biggest inflow since early April.
Europe Equity Funds posted a modest collective inflow ahead of a vote by French lawmakers to freeze a hike in the age citizens can collect the state pension and, towards the end of the month, a UK budget that many observers fear will be heavy on tax increases and light on spending cuts. France Equity Funds posted their 19th outflow since the start of the third quarter and UK Equity Funds their 32nd since the start of the second quarter.
The latest week saw the Dow Jones Industrials index hit another record high while the tech-heavy Nasdaq endured a bumpy ride. Sentiment towards US stocks was also buffeted by weak consumer confidence survey results, a pickup in announced layoffs and a slowdown in announced share buybacks and the ongoing government shutdown which ended on Nov. 13. US Equity Funds posted modest net inflows that, once again, went largely to Large Cap Blend and Growth ETFs.
Global Equity Funds, the largest of the diversified Developed Markets Equity Fund groups, racked up another inflow with Global ex-US Funds taking in nearly $5 for every $1 absorbed by funds with fully Global mandates.
Global sector, Industry and Precious Metals Funds
It was a near-repeat of the previous week’s trends for the 11 major EPFR-track Sector Fund groups during the second week of November. Telecom Sector Funds were the exception as eight of groups posted inflows with Technology Sector Funds again topping the list. Three groups, Commodities, Consumer Goods and Real Estate Sector Funds, extended modest redemption streaks.
Flows into Energy Sector Funds climbed to a 21-week high, with themes at the fund-level ranging from energy infrastructure through uranium and nuclear to natural gas. Pure Infrastructure Sector Funds posted a 29th consecutive week of inflows, racking up a total $7.6 billion, with a “smart grid” infrastructure fund leading the way this week. The shift to green energy and cleaner technologies still has momentum, and investors are getting exposure through transition-oriented funds. Flows into a custom group of funds with “energy transition” in their name have seen inflows for six straight weeks, after much of the past two years with flows in negative territory.
The $1.8 billion that investors committed to Healthcare/Biotechnology Sector Funds this week was the biggest since the end of January 2021. It was also their seventh straight weekly inflow, and 13th in the past 14 weeks. Of the top 10 funds with biggest inflows this week by dedicated country fund group, six were US, three were mainland China, and two belong to the diversified Global – four of which were Biotechnology Only Funds.
Over the past eight weeks, investors have pumped some $42 billion into Technology Sector Funds, bringing net flows since July 1 to $54 billion. That is roughly eight times the size of the $6.8 billion absorbed during the first six months of the year, and marks the largest half-year total on record, eclipsing the prior peak of $34 billion set in 2H20. The top three funds with the biggest inflows in the week to Nov 12 were all related to Semiconductors, one of which had a leveraged 3x position.
Bond and other Fixed Income Funds
With six weeks of 2025 to go, net flows into EPFR-tracked Bond Funds now stand at $803 billion, just $2 billion shy of the full year record set last year. During the latest week, Sovereign Bond Funds posted their biggest inflow of the current quarter, retail share classes recorded their 11th outflow year-to-date, and the total AUM of all institutional share classes now exceeds $9 billion.
Among the major regional and country groups, Japan Bond Funds chalked up their fifth largest inflow of the year so far, Global Bonds took in fresh money for the 19th time over the past 20 weeks and Australia Bond Funds for the 28th week running while US Bond Funds extended an inflow streak stretching back to the final week of April.
At the asset class level, High Yield and Mortgage-Backed Bond Funds saw flows rebound, Municipal Bond Funds took in over $1 billion for the fifth time quarter-to-date and Ultra Short Bond Funds posted their biggest inflow since early September.
Emerging Markets Bond Funds recorded their fourth straight inflow and Frontier Markets Bond Funds their 18th since the start of 3Q25. Diversified funds with hard currency mandates made the biggest contribution to the headline number while, at the country level, both China and South Africa Bond Funds pulled in over $100 million.
Among the Europe Country Fund groups, investors gravitated to funds dedicated to Nordic markets. Denmark Bond Funds posted their biggest inflow since early 4Q24 and Sweden Bond Funds since mid-3Q22. Norway Bond Funds also attracted fresh money. Overall, funds with corporate mandates outgained their sovereign counterparts for the eighth week in a row.
Foreign domiciled US Bond Funds added to their current inflow streak as YTD flows into all funds climbed past the $500 billion mark. For the second week running, flows into Small, Mid– and Long-Term US Bond Funds were relatively equal.
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