That bill, the One Big Beautiful Bill Act (OBBA), is currently being debated by the US Senate. It includes significant tax cuts that are expected to give the US economy a boost but keeps the Federal deficit around 5-6% of GDP over the next decade. In addition to the potential impact on debt servicing costs, other provisions of the bill change the investment cases for healthcare, green energy and municipal debt.
The week ending June 25 saw recent flows into Energy Sector and US Equity Funds reversed, year-to-date inflows for Cryptocurrency, Derivatives and Physical Gold Funds climb past the $16 billion, $18 billion and $39 billion marks, respectively, China Bond Funds chalk up their second inflow record so far this month and Equity Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates posted their biggest outflow since the first week of April.
Overall, EPFR-tracked Equity Funds posted a collective inflow of $3.4 billion during the latest reporting period while Alternative Funds absorbed $7.7 billion, Bond Funds $12.1 billion and Money Market Funds $26.1 billion.
At the single country and asset class fund levels, redemptions from Switzerland Bond and Australia Equity Funds hit a YTD high, Korea Equity Funds posted their biggest inflow since late 2Q23 and UK Money Market Funds recorded their second largest outflow so far this year. Leveraged Equity Funds extended their longest redemption streak in over five years, fresh money flowed into Aerospace & defense Funds for the 26th straight week and flows into Synthetic Funds climbed to their highest level since mid-December.
Emerging Markets Equity Funds
Going into the final week of June, EPFR-tracked Emerging Markets Equity Funds posted their fourth inflow over the past five weeks as fears of an energy price spike ebbed in tandem with the Israeli and Iranian missile strikes. Flows into Asia ex-Japan Equity Funds hit their highest total since early April and the diversified Global Emerging Markets (GEM) Equity Funds absorbed another $1.5 billion.
Although conflict in the Middle East drove the news cycle and markets during the first three weeks of June, the latest country allocations data shows the degree to which GEM Equity Fund managers have cut their exposure to the universe of EMEA markets. In January of 2010, the 10 largest EMEA country allocations among actively managed GEM Funds accounted for 21.6% of the average fund portfolio. Coming into June of this year, that had slipped to 9.8%.
The latest flows into Asia ex-Japan Equity Funds were driven by several of the major single country groups, with Korea Equity Funds tallying their biggest inflow in over two years, flows into India Equity Funds hitting an eight-week high, Taiwan (Province of China) Equity Funds recording their 23rd inflow so far this year and China Equity Funds posting consecutive weekly inflows for the first time since early April.
In the case of Korea Equity Funds, the inflows were broadly based with 33 funds attracting over $10 million. Foreign domiciled funds recorded their fourth straight week of above average inflows as investors responded to the receding threat of an oil price spike and positioned themselves for the fiscal stimulus championed by new President Lee Jae-myung.
Latin America Equity Funds saw their longest inflow streak since 4Q23 come to an end as Brazil Equity Funds surrendered over $150 million and Mexico Equity Funds posted their second-largest outflow so far this year. The latest sector allocations data shows actively managed Latin America Regional Fund exposure to energy and consumer discretionary plays rebounded from 45-month and record lows, respectively, coming into May.
Developed Markets Equity Funds
With the second of the year’s ‘quadruple witching’ dates behind them, US Equity Funds racked up their ninth outflow of the second quarter as the uncertainty caused by the new administration’s trade and tax policies continue to take their toll on investor sentiment. But solid flows into Global and Canada Equity Funds allowed EPFR-tracked Developed Markets Equity Funds to post a very modest collective inflow.
For the second week running, Global ex-US Equity Funds claimed the lion’s share of the more than $5 billion committed to all Global Equity Funds. Meanwhile, the average allocation to the US among actively managed funds with fully global mandates remains close to the 19-month low it hit in April.
The uncertainty about the direction of travel in the US also hit overseas domiciled US Equity Funds, which posted their first outflow in a month and biggest since the first week of April. Retail share classes extended a redemption streak stretching back to early February and US Dividend Funds tallied their first outflow in three months. The overall group remains heavily exposed to technology, with the average allocation coming into June the third highest on record.
In keeping with the rearmament theme that has underpinned recent flows, Europe Equity Fund allocations to industrials hit another record high. But flows during the latest week were lackluster, with none of the major single country groups absorbing over $90 million.
Japan Equity Funds racked up their fifth outflow over the past six weeks as Middle East tensions and rising food prices heightened concerns that the long-sought inflation policymakers have wanted to achieve is now sapping Japanese consumer confidence. Recent analysis from EPFR’s sister company CEIC highlights that, “The retail price of Koshihikari — Japan’s most renowned rice variety — has doubled from last summer’s levels. Similar increases have also been observed across other rice varieties and related products…this is contributing significantly to Japanese core inflation, far surpassing the effects of a 2003 spike related to bad weather and poor harvests.”
Investors also pulled back from other regional fund groups, with Australia Equity Funds recording their biggest outflow since mid-December and another $473 million – the most since late 4Q18 – flowing out of Pacific Regional Equity Funds.
Global sector, Industry and Precious Metals Funds
Sector-oriented investors backed off slightly heading into the final week of June as political, geopolitical and summer heat cranked up a few notches and the clock ticked down to the next corporate earnings season. Of the 11 major EPFR-tracked Sector Fund groups, six absorbed fresh money compared to nine the previous week, with flows ranging from an outflow of $2.9 billion for Technology Sector Funds to an inflow of $1.1 billion for Industrial Sector Funds.
For every $1 million that was pulled from defensive sectors in May, another $14 million was redeemed from cyclical sectors. Aggregating flows for cyclical sectors – Commodities, Energy, Financials, Real Estate and Tech – during the month of May reveals the biggest collective outflow in nearly three years, and the fourth largest outflow on record. This group was very popular early 2020 and enjoyed consecutive inflows in the two years thereafter, but during 24 of the past 37 months, flows have been negative.
Since EPFR started tracking Industrials Sector Funds in 2003, weekly inflows have topped $900 million just 22 times. Only one of those occurred between March 2023 and the end of last year, but in 2025 alone, there have already been five such weeks, including the latest one. Six months into the year, cumulative flows into Industrials Sector Funds have already surpassed the 2024 record of $8.3 billion and are nearly $5 billion higher than the total for Technology Sector Funds.
One of the technology sub-groups seeing staggering growth this year is Data Centers & AI Infrastructure Funds, which offer exposure to a niche that’s often described as the backbone of the artificial intelligence boom. Total assets in this group averaged $193 million between mid-2003 and mid-2024. But in the past year, it has skyrocketed by $1 billion, driven by surging demand for infrastructure capable of supporting AI deployment at scale. The group enjoyed a record inflow of $227 million in February this year, but both May’s monthly figure and the latest week showed outflows.
Elsewhere, Utilities Sector Funds have also fared well recently, with the latest inflows hitting a nine-week high that extended their current streak to three weeks. Water Funds, a major driver of the headline number for all Utilities Sector Funds in 2021, have experienced steady redemptions since.
For the first time since late Feb, Healthcare/Biotechnology Sector Funds posted consecutive weekly inflows, Financials Sector Funds brought an end to their five-week redemption streak, and flows into Real Estate Sector Funds continued for a third week though at a slower pace.
Bond and other Fixed Income Funds
Another week of inflows lifted the year-to-date total for all EPFR-tracked Bond Funds over the $270 billion mark. During the first 25 weeks of last year these funds had attracted $393 billion.
US Bond Funds account for the bulk of this gap, having absorbed $160 billion so far this year versus $275 billion during the same period in 2024. During the latest week, they pulled in another $8.7 billion – a five-week high – as yield hunger supersedes discomfort with the trajectory of the US deficit.
Elsewhere, the week ending June 25 saw Europe Bond Funds post their 22nd inflow YTD, Asia Pacific Bond Funds extended their longest inflow streak since early 3Q24 and Emerging Markets Bond Funds absorbed record setting amounts of fresh money while redemptions from a UK-domiciled Global Bond Fund snapped the overall group’s latest inflow streak.
At the asset class level, the latest run of inflows for High Yield Bond Funds hit nine weeks and $19.4 billion, both Inflation Protected and Bank Loan Funds chalked up their eighth inflow over the past nine weeks and Convertible Bond Funds extended their longest inflow streak of the year. Catastrophe Bond Funds posted their third outflow of the year and Green Bond Funds chalked up consecutive outflows for the first time since mid-April.
For the eighth week running investors committed more money to Europe Corporate Bond Funds than to their sovereign counterparts. They also pulled money out of Switzerland Bond Funds – historically a port of call in uncertain times – for a third straight week after the country’s central bank cut its benchmark rate to 0.
The headline number for Emerging Markets Bond Funds again had a made-in-China flavor as nearly $4 billion flowed into China Bond Funds. Funds with corporate mandates absorbed the bulk of this fresh money.
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