Going into the Thanksgiving Holiday, investors seemed largely unconcerned about stretched valuations in the American technology sector, sovereign debt dynamics in Europe and the US, or the latest sell-off in cryptocurrency markets. During the week ending Nov. 26, EPFR-tracked Technology Sector Funds absorbed fresh money for the 10th week running, combined flows into US Equity, Bond and Money Market Funds came in at $56 billion, Cryptocurrency Funds snapped their longest run of outflows since early April and year-to-date flows into all Bond Funds pushed deeper into record-setting territory.
Behind the solid headline numbers, however, were signs of discomfort with Japanese and British fiscal policy, uncertainty about the health of the US consumers and fatigue with key themes that have driven markets in recent years. Redemptions from Aerospace & Defense and Artificial Intelligence (AI) Funds climbed to 11 and 34-week highs, investors pulled another $2.7 billion out of Equity Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates, Consumer Goods Sector Funds posted their fifth straight outflow and UK Bond and Japan Equity Funds racked up their biggest outflows since mid-July and late May, respectively.
The latest score from EPFR’s ‘Bear Detector’ model, which employs principal component analysis of several factors, was 45.3. The model’s indicator values for the average bull and bear market are 43.5 and 0.2, suggesting current conditions are not alarming.
Overall, the fourth week of November saw a net $17.7 billion flow into all EPFR-tracked Equity Funds while Alternative Funds pulled in $2 billion, Bond Funds $20 billion and Money Market Funds $29.3 billion.
At the asset class and single country fund levels, Dividend Equity Funds chalked up their biggest inflow since late August, Bear Funds posted a third straight outflow for the first time in over a year, and Cybersecurity Funds experienced net redemptions for the 14th time over the past 15 weeks. Turkey and China Money Market Funds both pulled in over $1.4 billion, Vietnam Equity Funds recorded their 18th outflow since mid-July and Greece Equity Funds added their longest redemption streak since 4Q24.
Emerging Markets Equity Funds
Appetite for exposure to Emerging Asian markets with strong artificial intelligence stories held up in late November, with mainland China, Taiwan (Province of China) and Korea Equity Funds all attracting over $1 billion as EPFR-tracked Emerging Markets Equity Funds tallied their 14th inflow during the past 15 weeks.
Actively managed funds and retail share classes continue to struggle, with the former posting their 20th consecutive outflow and the latter their 42nd outflow year-to-date. But Frontier Markets Equity Funds extended their longest run of inflows since 4Q24 and the diversified Global Emerging Markets (GEM) Equity Funds chalked up their seventh straight inflow.
Among Asia ex-Japan Equity Fund groups, flows into foreign domiciled China Equity Funds hit an eight-week high, India Equity Funds snapped their 11-week outflow streak, flows into Philippines Equity Funds rebounded to a 28-week high and Thailand Equity Funds tallied their 98th weekly outflow since the beginning of 2024. In the case of the latter, weaker tourism numbers and shifting trade dynamics have hit manufacturing, domestic consumption and Thailand’s balance of payments.
EMEA Equity Funds posted a collective outflow as redemptions from Africa Regional Funds accelerated, hitting their highest weekly total since early 1Q14. These were partially offset by Israel Equity Funds’ ninth consecutive inflow as a fragile ceasefire in Gaza enters its eighth week and further commitments to Romania Equity Funds. Romania’s benchmark equity index is up over 35% so far this year, partly due to expectations of further fiscal consolidation and sales of state owned enterprises.
Flows to Latin America Equity Funds hit the buffers as Brazil and Colombia Equity Funds posted their biggest outflows since early 2Q25 and late 1Q22, respectively.
Developed Markets Equity Funds
The week ending Nov. 26 saw EPFR-tracked Developed Markets Equity Funds extend their longest inflow streak since a 20-week run ended in 3Q24 as flows into US, Global and Canada Equity Funds offset redemptions from Japan and Europe Equity Funds. Two budgets, the current corporate earnings season, a trickle of lagged official data from the reopened US government and perceptions of the Federal reserve’s willingness to cut interest rates again at its December meeting all shaped investor sentiment.
One of the budgets in the spotlight was the supplemental one being prepared by the new Japanese government headed by Prime Minister Sanae Takaichi. Markets are asking how the $115 billion package will be funded, given Japan’s high debt to GDP ratio, and an initially warm reaction has cooled rapidly as Japanese 10-year bond yields touched a 16-year high. Japan Equity Funds tallied their biggest outflow in six months, with funds tracking the TOPIX Index topping the list.
The second budget was the second presented by Britain’s Labour government. As with the first budget in 2024, it boosted taxation and welfare spending, triggering snap judgements that future economic growth will suffer. UK Equity Funds ended the week with their 45th outflow of the year so far during a week when flows to all Europe Equity Fund groups except Switzerland-mandated funds were lackluster. British and European equity now sit at the bottom of EPFR’s weekly multi-asset rankings.
Despite another week of flows into US Equity Funds, their 11th in a row, US equity is one place out of the bottom quintile of those rankings as managers with multi-asset mandates look elsewhere. In cash terms, US Large Cap Blend and Value Funds recorded the week’s biggest inflows while Small Cap Blend Funds led the way in % of AUM terms.
Global Equity Funds, the largest of the diversified Developed Markets Equity Fund groups, posted modest inflows with the bulk of that going to funds with ex-US mandates.
Global sector, Industry and Precious Metals Funds
Flows to EPFR-tracked Sector Fund groups during the fourth week of November reflected renewed hopes for the technology sector, in part because their cost of capital is expected to drop as US interest rates are cut to arrest the deteriorating outlook for consumer spending.
Of the 11 major groups, seven recorded inflows and four posted outflows ranging from less than $1 million to $1 billion. Technology and Healthcare/Biotechnology Sector Funds were again the biggest money magnets, taking in a combined $4.9 billion, with the latter helped by speculation that US President Donald Trump will seek to extend healthcare subsidies he previously opposed.
Consumer Goods Sector Funds posted another outflow as investors digested rising US credit card delinquencies, shrinking numbers of job openings and consumer confidence numbers. These trends are expected to hit the profits of financial firms, as is the impact of lower interest rates on their loan spreads, and redemptions from Financial Sector Funds jumped to a 28-week high. But lower rates are positive for real estate and the regional banks that lend to them, and flows into Regional Bank and all Real Estate Sector Funds climbed to nine and 25-week highs, respectively.
Uninspiring forecasts for oil, natural gas and coal prices dampened investors’ appetite for Energy Sector Funds in late November. Nuclear & Uranium Funds, however, extended an inflow streak stretching back to mid-August.
Both Physical Gold and Silver Funds posted solid inflows during a week when the price of gold remained north of $4,000 an ounce and the price of silver around $50 an ounce.
Bond and other Fixed Income Funds
The money keeps flowing into EPFR-tracked Bond Funds, which have now absorbed some $840 billion with five weeks of 2025 to go, with investors committing another $20 billion going into the final days of November. US Bond Funds accounted for over half of the headline number, and there was a noticeable rebound in risk appetite with flows into High Yield Bond Funds hitting a seven-week high and both Bank Loan and Collateralized Loan Obligation (CLO) Funds attracting fresh money.
At the regional and country levels, UK Bond Funds were the only group to post a significant outflow – the biggest in four months – as investors maneuvered ahead of a budget that some feared would trigger a backlash from debt markets. Redemptions from UK Sovereign Bond Funds were the biggest since EPFR started tracking them in 4Q04. Meanwhile, Europe ex-UK Bond Funds extended an inflow streak that started during the third week of April.
Also under scrutiny is Japanese debt, given sticky inflation and the additional borrowing needed to fund the new government’s proposed stimulus package. Redemptions from Japan Bond Funds climbed to an eight-week high, with investors rotating their Developed Asia exposure to Australia Bond Funds which posted their 29th consecutive inflow.
Emerging Markets Bond Funds tallied their 31st inflow since mid-April, with Local Currency Funds modestly outgaining their hard currency counterparts. At the country level, India Bond Funds posted their biggest weekly inflow since early 3Q23, and mainland China Bond Funds added to their current inflow streak. China’s allocation among actively managed Global Emerging Markets (GEM) Bond Funds has, however, been falling since the first quarter of 2021.
US Bond Fund retail share classes and funds domiciled overseas both recorded inflows during the latest week, as did US Municipal, Inflation Protected and Mortgage-Backed Bond Funds. Total inflows this year for all US Bond Funds now stand at $550 billion, which is 93% of the full year record set in 2021.
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