US Equity Funds posted an eye-catching year-to-date high inflow during a week that ended with the Fed cutting interest rates expectedly and a meeting that pointed to balancing risks facing the US economy: softening labor market and lingering inflation. Year-to-date flows into Bond Funds are now heading towards the $650 billion mark.
For a third straight week, the total trading volume (absolute value of outflows + inflows) of all assets tracked by EPFR stood above $95 billion, well beyond their average of $70 billion year-to-date. Overall, a net $68.4 billion flowed into all EPFR-tracked Equity Funds this week, Bond Funds took in $14.3 billion and Alternative Funds $8.2 billion. Money Market Funds brought an end to their six-week inflow streak as $4.8 billion flowed out, while Balanced Funds posted modest inflows close to $50 million.
A day before the rate decision on Sep 18, EPFR’s sister company CEIC showed through its CME FedWatch tool that it was set in stone, but there has been some shift in expectations for the next two meetings on Oct 29 and Dec 10. Last week, market participants were not confidently pricing in a 25 basis point cut for those two meetings. This week, that has shifted, with more confidence in the expectations of those consequent rate cuts. That puts it at an expected 75 basis point cut before year-end.
The latest week also saw the SEC approving of a multi-token fund, the first crypto ETF of its kind. Flows into EPFR-tracked Cryptocurrency Funds, which are a part of the alternative universe, shot to a five-week high of $3.8 billion. Of the top 10 funds with the biggest inflows, three were Bitcoin-focused, pulling in over $2 billion, five were investing in Ether, while Solana and CoinDesk also featured.
Emerging Markets Equity Funds
Emerging Markets Equity Funds posted their second-largest inflow of the year with $7.6 billion added during the week to Sept. 17. Retail flows were positive for a second consecutive week for the first time since June last year, and flows for their institutional counterparts rose to a 23-week high.
Every major EM Equity region saw flows reach multi-week highs. Flows into Global Emerging Markets Equity Funds were the biggest since January 2023, for Asia ex-Japan Equity it was the most in 23 weeks, while Latin America and EMEA Equity Funds posted 14- and four-week high inflows, respectively.
Flows for China Equity Funds have been positive in four of the past five weeks, though flows year-to-date sit just in negative territory. Taiwan (POC) Equity Funds, meanwhile, have posted only two inflows in the past 11 weeks, a stark contrast to the prior 22 months. Redemptions from Korea Equity Funds – the highest performing EM country fund group – were the largest in 15 months.
Saudi Arabia Equity Funds have seen flows as a percentage of assets climb to 38% year-to-date, the most since 2019 and in the latest week, extended their inflow streak to 37 weeks. Among the other major EMEA Equity Fund groups, investors directed the most money towards Poland Equity Funds, it was the ninth straight inflow for South Africa Equity Funds, marking their longest streak in over a year, and Turkey Equity Funds posted a second consecutive week of inflows for the first time since early July.
Developed Markets Equity Funds
Flows propelled to $60 billion for all Developed Markets Equity Funds, the biggest weekly inflow of the year. Those were backed by Large Cap Blend Funds and US-dedicated funds which accounted for over 95% of the headline number during a week when the Fed cut interest rates by 25 basis points, taking it to the 4%-4.25% range.
For US equity funds, a single passively-managed ETF tracking the S&P 500 index pulled in over $30 billion this week and flows into US Small Cap Equity Funds swelled to a 41-week high though it was just their second inflow of the past 13 weeks. Among the other top 10 funds with the biggest inflows, on the thematic side, investors pumped $3.8 billion into one of the major US equity factor funds – Momentum – another $2 billion into a factor rotation fund and over $1.6 billion went to an aerospace & defense fund.
Year-to-date flows for custom groupings of Equity Funds by factors – momentum, quality, value, volatility, and defensive – are positive across the board. Inflows for Momentum Equity Funds have persisted in 22 of the past 23 weeks, with the group racking up $14.8 billion (25% of their assets) in the past year. Quality Equity Funds are the runner up with $13.8 billion (5% of their assets), some of which have ties to Free Cash Flow Funds.
As exclusively passively managed ETFs, managers seeking new ways to build ETFs from an index perspective are finding a sweet spot – FCF Funds. After strong inflows during 2024 into early 2025, and a brief but choppy 2Q25, flows for this group have been positive for the past 12 straight weeks. Inflows in August skyrocketed to $1.4 billion, topping any previous monthly inflow since EPFR started tracking these funds in late 2017.
On the other side of the Atlantic, Europe Equity Funds posted their first outflow in two weeks, as redemptions from UK Equity Funds hit an 18-week high and Germany Equity Funds continued a five-week run of outflows. Meanwhile, Switzerland Equity Funds posted a fourth straight week of inflows.
Global sector, Industry and Precious Metals Funds
In the week to Sept 17, seven of the 11 EPFR-tracked Sector Funds groups posted inflows with two topping $1.5 billion – Telecom and Commodities/Materials Sector Funds – and another two topping $2.3 billion – Financials and Industrials Sector Funds. Of the four groups posting outflows, the heaviest were seen by Consumer Goods Sector Funds as they snapped their four-week, $2 billion total run of inflows.
An AI infrastructure deal between Microsoft and Nebius. A $5 billion partnership between Nvidia and Intel. Progressing Sino-US trade talks and chip wars. Micron Technology stocks set to profit from China’s refusal to let Nvidia do business there. It is hard to ignore the buzz around semiconductor companies and discussions, as countries push to control a slice of the AI market. For Technology Sector Funds this week, redemptions from a leveraged 3x semiconductor ETF and another domestically-domiciled US tech fund just barely offset collective inflows of $4.6 billion to an AI Innovation ETF and another S&P benchmarked fund.
Hong Kong SAR and China Technology Sector Funds rank first and seventh, respectively, among all country-level sector groups with the biggest inflows year-to-date. The former has seen 13 straight weeks of inflows. US-dedicated funds, meanwhile, sit at the other end with outflows nearing $2 billion so far this year, and redemptions in the latest week hit an eight-week high.
Positioned third of the green side, year-to-date flows into Europe Industrials Sector Funds have surpassed $7 billion (or 470% of their assets). In the week to Sept 17, flows reach an eight-week high though were modest, while US-dedicated funds directed the overall headline number. For all Industrials Sector Funds, flows were just $110 million shy of their record-setting $2.9 billion absorbed mid-4Q16. That pushed the total of their current 23-week inflow streak to $15.2 billion. At the fund-level, three of the top four, and six of the top 10 were tracking aerospace & defense.
Infrastructure Sector Funds also extended a lengthy run of inflows, stretching into 21 weeks and over $5 billion total. A smart grid ETF pulled in the most money for the group, and US-domiciled funds accounted for over three-fourths of this week’s inflow. DTE Electric is expected to add 700 devices to its electric grid by the end of 2025, improving reliability and averting outages. Meanwhile, Utilities Sector Funds posted a 17-week high outflow and their third of the past four weeks, while Energy Sector Funds posted modest, but negative flows.
Following a record-setting inflow of $2.6 billion early August, Telecoms Sector Funds posted their second-largest weekly inflow on record at $1.6 billion this week directed by a single SPDR fund.
Bond and other Fixed Income Funds
With EPFR’s monthly data for August released, flows into all Bond Funds came in above $125 billion for a second consecutive month, and year-to-date flows surpassed the $600 billion mark in the week to Sept. 17. For every $1 billion committed to sovereign bond funds, $2 billion went to their corporate counterparts.
US-dedicated Investment Grade Corporate Bond Funds racked up $14 billion during August, the largest monthly total since June 2020. But after seven weeks in positive territory, the group saw its first outflow.
In a note by CEIC economists, they show how “US corporate and investment-grade credit spreads over government debt narrowed to 72 and 61 basis points respectively in August. For investment-grade bonds, that’s the tightest since at least 2016 [and] suggests that financial stress is low in the corporate sector, despite the unsettled global economy.”
The report continues to compare Cbonds’ index of corporate bonds against a 30-day rolling sum of flows into US Equity and Bond Funds. “US corporate bonds have gained over 6% so far in 2025, supported by net inflows to bond funds. This has contrasted with slowing inflows to US-based equity funds since “Liberation Day.” The rotation has coincided with the gains in the US corporate bond index: investors de-risked their equity exposure with stock indices nearing record highs, increasing allocations to investment-grade corporate bonds.”
For a ninth straight week, and 16th time in the past 17 weeks, Short-Term Bond Funds took in fresh money. Flows for funds with a longer-duration rose to a three-week high, and Intermediate-Term Bond Funds posted a second inflow above $45 billion. Year-to-date, US Short-Term Sovereign Bond Funds have seen the biggest inflows as a percentage of assets at over 10%. A lower yield is an almost certain outcome with short-term bonds and interest rate cuts; these inflows come from investors locking in yields over the past year, before a drop in rates.
Though flows remained in positive territory for both Developed and Emerging Market Bond Funds, they were the lowest totals in 12 and nine weeks, respectively. Flows into GEM, EMEA and Latin America Bond Funds offset the heaviest redemptions of the year for Asia ex-Japan Bond Funds. Similarly, flows into Global, North America and Europe Bond Funds clouded a second straight week of outflows for Asia Pacific Bond Funds.
At the DM country level, flows into Canada Bond Funds hit their highest level since early 2Q25 at above $1 billion, Norway Bond Funds posted their heftiest inflows since late 1Q20 just shy of the $1 billion mark, while redemptions from Japan Bond Funds climbed to a 12-week high and Singapore Bond Funds saw record-setting outflows of $230 million.
At the EM country level, Indonesia Bond Funds snapped a 23-week inflow streak, outflows from Thailand Bond Funds reached $1.4 billion, the biggest since early 2Q20, and South Africa Bond Funds took in a seventh week of inflows. Flows into Korea Bond Funds surpassed China Bond Funds for the first time since mid-1Q25.
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