The third week of January saw mainland China-mandated Equity Funds surrender record-setting amounts of money. The redemptions, attributed to institutional investors following official guidance, came on the heels of an increase in margin financing requirements as Chinese equity markets rallied to levels last seen in the second quarter of 2015.
Of the 20 China Equity Funds that recorded the biggest outflows, half of them featured in the list of the 20 funds recording the biggest inflows during the three-week period between Sept. 19 and Oct. 9, 2024, when over $60 billion flowed in after the benchmark Shanghai Composite index fell to a five-year low.
The redemptions from domestically domiciled China Equity Funds, which exceeded $45 billion, overshadowed another solid week for several of the major Sector Fund groups as the 4Q25 corporate earnings season gathered momentum. The week ending Jan. 21 also saw Physical Gold Funds pull in $5.4 billion while combined flows into Global and Global Emerging Markets (GEM) Equity and Bond Funds exceeded $20 billion.
Overall, a net $43.2 billion flowed out of all EPFR-tracked Equity Funds during the latest week. Investors steered $721 million into Money Market Funds, $6.9 billion into Alternative Funds and $15.3 billion into Bond Funds.
At the asset class and single country fund levels, Nuclear & Uranium and Convertible Bond Funds posted their biggest weekly inflow since EPFR started tracking them in 3Q07 and 3Q03, respectively, redemptions from Cryptocurrency Funds hit a nine-week high and Total Return Funds extended an inflow streak stretching back to the final week of 2Q25. Austria Equity Funds chalked up their biggest outflow in over 10 months, flows into Japan Money Market Funds climbed to a 21-week high and Russia Bond Funds chalked up their ninth straight inflow.
Emerging Markets Equity Funds
Although the diversified Global Emerging Markets (GEM) Equity Funds posted record setting inflows for the second week running and Latin America Equity Funds pulled in another $500 million, the huge outflows from mainland China-mandated funds meant that the headline outflow for all EPFR-tracked Emerging Markets Equity Funds was the biggest on record in cash terms and the biggest since 1Q08 in flows as a % of AUM terms.
The latest week did see flows into retail share classes hit their highest level since late 2Q23, EM Equity Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates post their biggest inflow in over six months and EM Bear Funds tally their fourth straight inflow.
Among the other Asia ex-Japan Country Fund groups, Korea Equity Funds pulled in over $1 billion as flows into foreign domiciled funds jumped to a record high. On the other end of the scale, Vietnam Equity Funds set a new outflow mark ahead of the ruling Communist Party’s National Congress, a meeting held every five years to map out economic policy and decide on the leadership of the party.
Latin America Equity Funds took in over $500 million for the second week running, with investors seeking diversified exposure to the region and buying into Chile and Peru’s copper story. Those countries are the biggest and third biggest producers of copper at a time when estimates for the additional demand from data center construction over the next five years are running around 400,000 tonnes.
While investors have been steering growing sums into conventional Latin America Equity Funds, those with the resources to utilize Hedge Funds have been pulling money out of Latin America-mandated funds since the third quarter of 2023.
Funds dedicated to Emerging European markets again drove the headline for all EMEA Equity Funds, with Poland and Romania Equity Funds extending inflow streaks that started in late October and late June, respectively.
Developed Markets Equity Funds
For the second time this year and third time over the past five weeks, EPFR-tracked Developed Markets Equity Funds recorded net outflows as redemptions from US Equity Funds more than offset solid flows into Europe, Global, Canada and Japan Equity Funds.
Global Equity Funds, the largest of the diversified Developed Markets Equity Fund groups, recorded the biggest inflow as their current inflow streak hit 12 weeks and $88.5 billion. During the latest week, funds with fully global mandates took in over $3 for every $1 committed to Global ex-US Equity Funds. Dividend paying funds remain popular: over the past 20 months, Global Dividend Funds have only recorded six weekly outflows.
Investors steered fresh money into Europe Equity Funds for the sixth week running, with the bulk of the latest inflows finding their way to the two major regional groups. At the country level, France Equity Funds posted their first inflow of the New Year and only their fifth since the beginning of 3Q25. But funds dedicated to Denmark, whose control of Greenland is under pressure for US President Donald Trump’s administration, chalked up their biggest outflow in over 11 months. Germany Equity Funds also experienced net redemptions as soft domestic demand adds to the challenges facing the Eurozone’s largest economy.
Analysis of credit card data by EPFR’s sister company CEIC indicates that, “In Germany, CPI-adjusted card spending on Christmas goods in 2025 remained clearly below the levels seen over the previous five years. This pattern aligns with a more cautious household sector shaped by weaker income dynamics and elevated precautionary saving.”
US Equity Funds chalked up their third outflow during the past five weeks as the threat of more tariffs – subsequently withdrawn – roiled equity markets. However, foreign domiciled funds took in fresh money for the ninth consecutive week. Among the major groups by capitalization and investment style, only Mid Cap Blend Funds recorded an inflow. Meanwhile, to the north, Canada Equity Funds posted their third inflow of 2026, with their Large Cap Blend Funds seeing the biggest inflows while redemptions from Large Cap Value Funds climbed to a 25-week high.
Among the Asia Pacific Equity Fund groups, flows to Japan Equity Funds rebounded despite market weakness triggered in part by fears an emboldened Prime Minister Sanae Takaichi, who has called a snap election, will test the bond market’s patience with Japan’s persistent deficit spending.
Global sector, Industry and Precious Metals Funds
The third week of the New Year was another solid one for EPFR-tracked Sector Funds, with the trading volume (absolute value of outflows + inflows) remaining elevated. The number of groups reporting outflows did, however, tick up from one last week to four this week.
Among the seven major groups that posted inflows, five absorbed over $1 billion as Commodities/Materials Sector Funds chalked up another weekly inflow record and Industrials and Financials Sector Funds both pulled in around $3 billion.
Financials Sector Funds posted their fifth straight inflow on the heels of some impressive 4Q25 earnings reports from the likes of JPMorgan, Goldman Sachs, Citigroup, and Bank of America. Financials ex-Bank Funds have seen just five weeks of outflows since June and extended their current inflow streak to six weeks while funds with “broker” or “brokerage” in their name racked up their biggest inflow since mid-September.
Investor sentiment for the broad technology story is going one way, while Artificial Intelligence (AI) Fund flows are chugging along on the opposite track. All Technology Sector Funds endured their sixth outflow of the past eight weeks, a pattern that has not occurred since the final eight weeks of 2024. Outflows reached $1.4 billion this week, matching the $1.4 billion flowing into Artificial Intelligence & Robotics Funds, which was an 11-week high. In 2025, flows for this subgroup topped $34 billion, about 47% of the total flows for the entire sector.
The latest flows into Commodities/Materials Sector Funds came during a week when the price of gold inched even closer to the $5,000 per ounce mark, and topped last week’s record total by $1 billion.
Bond and other Fixed Income Funds
Despite the warning shot fired by Japan’s bond market during the third week of January and further outflows from mainland China-mandated funds, EPFR-tracked Bond Funds ended the week with another solid collective inflow that lifted their year-to-date total to $45 billion. Heading into the first round of major central bank policy meetings, Europe, US, Canada, Global and Asia Pacific Bond Funds recorded inflows ranging from $282 million to $12.9 billion while Emerging Markets Bond Funds posted a third consecutive outflow for the first time since late 1Q25.
At the asset class level, Municipal, Inflation Protected, Mortgage Backed, Bank Loan and Convertible Bond Funds all attracted fresh money. In the case of Convertible Bond Funds, net inflows exceeded $1 billion for only the second time since 1Q21.
The first major central bank to meet was the European Central Bank, which wrapped up its first policy meeting of 2026 by leaving its key interest rate unchanged. Europe Corporate and Sovereign Bond Funds both posted an outflow that was more than offset by flows into funds with mixed mandates. At the country level, flows to Italy, France and Switzerland Bond Funds hit six, nine and 25-week highs, respectively, while redemptions from UK Bond Funds came in at an eight-week high.
Allocations data from the two major regional Europe Bond Fund groups shows that active managers opted to cut their exposure to many core developed markets and rotate that exposure to regional emerging markets and the debt issued by foreign companies to fund European operations.
The US Federal Reserve meets at the end of the coming week and is also expected to keep interest rates on hold. Flows to US Bond Funds also favored those with mixed sovereign-corporate mandates, and intermediate term (four to 10 years) was again the preferred duration with flows into Intermediate Term US Bond Funds hitting a record high.
Emerging Markets Bond Fund flows followed the same pattern as their equity counterparts, with strong flows to the diversified Global Emerging Markets (GEM) Bond Funds offset by redemptions from China Bond Funds. Investors did steer fresh money into Frontier Markets Bond Funds for the 15th week in a row.
Also seeing fresh money were Asia Pacific Regional and Japan Bond Funds during a week when yields on Japanese government’s 30 and 40-year notes climbed to record highs. With the Bank of Japan no longer playing the role of buyer of last resort, buyers are uncomfortable with the new government’s fiscally expansionary policies.
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