With the holidays behind them and the first corporate earnings season of the New Year kicking off, investors spent the second week of January aggressively building – or rebuilding – their positions for the months ahead. Net flows into all EPFR-tracked Equity Funds were the second largest since the beginning of the decade while combined flows into the 11 major Sector Fund groups set a new weekly record.
Behind the headline numbers, flows to US and mainland China-mandated Equity Funds rebounded, Physical Gold Funds added to their current inflow streak, and investors poured a combined $27.5 billion into Global and Global Emerging Markets (GEM) Equity and Bond Funds. Appetite for the artificial intelligence (AI) and global rearmament stories also recovered, with flows into dedicated AI and Aerospace & Defense Funds hitting nine and 17-week highs, respectively.
Overall, the week ending Jan. 14 saw Equity Funds absorb a net $71.1 billion while Balanced Funds took in $1.9 billion, Alternative Funds $5.2 billion, and Bond Funds $23.4 billion. Investors pulled over $60 billion from Money Market Funds, which are coming off a year when flows tracked the previous year’s pattern and the final total.
At the single country and asset class fund levels, Canada Equity Funds chalked up their 27th inflow since the beginning of 3Q25, redemptions from India Bond Funds climbed to a 14-week high and flows into Greece Equity Funds climbed to a four-month high. Nuclear & Uranium Funds extended an inflow streak stretching back to the second week of August, Municipal Bond Funds chalked up their biggest inflow since mid-September, and Convertible Bond Funds recorded consecutive inflows for the first time since late October.
Emerging Markets Equity Funds
The second week of January was a good one for Emerging Markets Equity Funds in general and a very good one for funds offering exposure to mainland China, Latin America, frontier markets, emerging Europe and Korea. It was a bad one, in flow terms, for fund groups dedicated to Africa, Taiwan (POC), Thailand and India. Overall, the group posted its fourth largest inflow since EPFR started tracking it weekly in 2000, with more $9 billion flowing into Asia ex-Japan Equity Funds and the diversified Global Emerging Markets (GEM) Equity Funds attracting record-setting amounts of fresh money while Frontier Markets and Latin America Equity Funds posted their biggest inflows since 1Q23 and 1Q20, respectively.
Retail share classes, EM Dividend Funds and funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates recorded outflows for the week despite this influx of new money. But Leveraged EM Equity Funds recorded a modest inflow with 2x leverage the sweet spot. Over the decade so far, however, investors have favored funds with 3x mandates even though their performance has lagged their less leveraged peers.
Flows to Latin America Equity Funds rebounded strongly from the previous week as investors recovered from the shock of the US intervention in Venezuela and refocused on the prices that the region’s commodity exports are currently commanding. With copper prices testing record highs, funds dedicated to Chile, Peru, and Mexico – the top, third and 10th largest global producers of ‘red gold’ – saw inflows climb to eight, 13, and 14-week highs, respectively.
Among the EMEA Country Fund groups, there was a noticeable pivot from Africa to Emerging Europe. Redemptions from South Africa Equity Funds hit their highest level since mid-3Q24 and Africa Regional Equity Funds saw their longest inflow streak in over three years come to an end while Poland Equity Funds racked up their 13th consecutive inflow, flows into Emerging Europe Regional Equity Funds climbed to a 21-week high, and Romania Equity Funds attracted record-setting amounts of fresh money.
The headline number for Asia ex-Japan Equity Funds was paced by flows into mainland China and Korea Equity Funds. But concerns that recent cuts in consumption taxes will translate into a bigger fiscal deficit and higher interest rates weighed on India Equity Funds which posted their biggest outflow since mid-October.
Developed Markets Equity Funds
EPFR-tracked Developed Markets Equity Funds rebounded from their generally lackluster starts to 2026 during the second week of the year as US, Global, Canada, and Europe Equity Funds recorded inflows that ranged from solid to eye-catching.
The latest week saw two benchmark US equity indexes, the S&P 500 and Dow Jones Industrials, hit new record highs as did Germany’s DAX, Japan’s Nikkei 225, and the UK’s FTSE 100. US Equity Funds pulled in over $35 billion with Large Cap Blend Funds absorbing the lion’s share of those inflows. Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates posted consecutive weekly inflows for the first time since late July.
US equity markets continue to enjoy a significant tailwind from companies buying back their own shares, supporting their price by shrinking the “free float” available to buyers. According to Senior Liquidity Analyst Winston Chua, “Corporate America announced a record $1.38 trillion worth of buybacks in 2025, modestly surpassing 2024 levels. Beneath the figures was a significant sectoral rotation. Financial companies sharply ramped up buybacks, while technology, energy, and consumer-companies retreated somewhat from prior-year peaks.”
The lack of obvious concern about deficit spending in the world’s biggest economy is mirrored on the other side of the Atlantic. During the latest week, Europe Equity Funds chalked up their fifth straight inflow and eighth over the past 10 weeks. At the country level, however, equity funds dedicated to the ‘Frugal Five’ markets – Sweden, Austria, Finland, Denmark, and the Netherlands – all experienced net redemptions.
Asia Pacific Equity Fund groups again struggled to attract fresh money. Flows to Japan Equity Funds came in under $20 million as new Prime Minister Sanae Takaichi signaled her intention to call a snap election in hopes of strengthening her mandate for fiscally expansionary policies. But flows into foreign domiciled Japan Equity Funds climbed to a 10-week high.
Global Equity Funds, the largest of the major diversified Developed Markets Equity Fund groups, posted their 12th straight inflow and 22nd since mid-August, a run that has seen over $115 billion flow into these funds.
Global sector, Industry and Precious Metals Funds
The total trading volume (absolute value of outflows + inflows) for the 11 EPFR-tracked Sector Fund groups hit a record high at over $22 billion during the second week of January as all but one of the fund groups posted inflows. Investors committed roughly $5.5 billion apiece to Technology and Commodities/Materials Sector Funds, over $3 billion to both Financials and Industrials Sector Funds, and $1.6 billion to Telecom Sector Funds.
The flows for Commodities/Materials Sector Funds were record-high and pushed the group’s seven-week streak total to nearly $15 billion. The tint of gold to nearly every inflow absorbed from late August into October has shifted. During the latest week, flows for were broad based with 18 funds attracting over $100 million. Of those, four nonferrous metal funds collectively pulled in $1.4 billion, another four rare earth metals funds saw $642 million flow in, and two funds tied to the chemicals industry had inflows of nearly $500 million. The remaining consisted primarily of mining funds with copper, gold, and silver amongst them.
Looking at the alternatives side, flows into Physical Gold Funds remained positive for a 10th straight week. Silver Funds rebounded from the previous week’s outflow, tacking on their 10th inflow of the past 11 weeks. In a recent data story from CEIC on silver’s recent rally, the authors highlighted how it “has even more industrial uses than its precious metal counterpart – especially applications relevant to the green-energy transition. Combined with its traditional role as a macro hedge and constraints on new supply, these factors led to a speculative surge as traders bet on a sustained global deficit.”
Looking at the Industrial Sector Funds with the biggest inflows this week, the top 12 were all ETFs absorbing between $100 and $500 million. Nine of those were aerospace and defense-related with inflows reaching $2 billion total.
Investors are tapping into another space related industry through Telecoms Sector Funds, pumping $1.2 billion into a single fund that primarily invests in Chinese companies in the satellite communication industry.
Bond and other Fixed Income Funds
Funds with Asian mandates aside, EPFR-tracked Bond Funds have enjoyed a brisk start to the New Year with inflows over the first two weeks of the year north of $30 billion. In the process, investors have largely shrugged off the latest pressure US President Donald Trump’s administration has applied to Federal Reserve Chair Jerome Powell and the scale of new sovereign issuance expected from the US, Europe, and Japan in 2026.
The latest week saw flows into US and Europe Bond Funds extend inflow streaks stretching back to last April and Global Bond Funds record their biggest inflow since mid-May while Asia Pacific Bond Funds posted their fifth outflow during the past seven weeks, and Asia ex-Japan Bond Funds saw over $4 billion redeemed.
At the asset class level, flows into Inflation Protected and Convertible Bond Funds hit seven and 12-week highs respectively, Ultra Short-Term Bond Funds posted their biggest inflow since early August, and funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates tallied their 16th inflow over the past 20 weeks. Municipal Bond Funds absorbed nearly $3 billion – a 17-week high – as they retain the momentum built up by investors during the second half of last year.
This interest in municipal debt contributed to the headline number for all US Bond Funds during a week when flows to corporate and sovereign-mandated funds were largely even. Intermediate Term US Bond Funds posted their 17th straight inflow and their biggest since late 3Q11. Foreign domiciled funds added to their current inflow streak, but redemptions from retail share classes were the fourth largest during the past 12 months.
Investors committed more money to Europe Corporate Bond Funds than their sovereign counterparts for the fourth week running. At the country level, Spain Bond Funds chalked up their biggest outflow since mid-4Q24 while UK Bond Funds recorded their biggest inflow in over a year. Norway and UK Bond Funds turned in the best collective performance last year while Germany and France Bond Funds anchored the other end of the table.
For the second week running, redemptions from mainland China-mandated corporate debt funds weighed on the headline number for all EPFR-tracked Emerging Markets Bond Funds, offsetting strong flows into the diversified Global Emerging Markets (GEM) Bond Funds.
Among the Asia Pacific Bond Fund groups, Japan Bond Funds posted their biggest outflow since the same week last year. Investors are concerned about the current government’s plans to boost public spending and the implications for inflation, interest rates, and debt servicing costs.
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