As the latest iteration of the long-running conflict between the Iran and the US entered its second week, flows to many EPFR-tracked fund groups shifted to neutral or went into reverse. Investors remain reluctant to overreact, but the week ending March 11 saw them step up their repositioning in the face of sharply higher energy prices and the impact that may have on inflation. Funds dedicated to Europe, Turkey and India were among those hit by these shifts.
US Equity Funds ended the latest week with a modest inflow and flows into Swiss and Japan-mandated Equity Funds reflected those countries ‘safe haven’ status. But some of the comfort that investors have taken this year in diversified global exposure evaporated, with Global Emerging Markets (GEM) Bond and Equity Funds experiencing net redemptions for the first time since the first weeks of November and October, respectively, while Global Bond Funds posted only their third outflow during the past eight months.
While the conflict in the Middle East dominated the week’s headlines, pre-existing concerns also weighed on investor sentiment. These include the impact of artificial intelligence on software and service business models, America’s K-shaped economic growth, and stresses in the private credit market. With Morgan Stanley joining the list of managers capping redemptions from private credit funds, both Financial Sector Funds and dedicated Private Credit Funds experienced record-setting outflows.
Overall, the latest week saw EPFR-tracked Equity Funds post an inflow of $13.5 billion while collective flows into all Bond Funds fell to their lowest level since the third week of 2Q25. Investors also steered $794 million into Money Market Funds and $1.5 billion into Alternative Funds while just shy of $1 billion flowed out of Balanced Funds.
At the single country and asset class fund levels, Japan Money Market Funds posted their biggest weekly outflow in nearly three years, Canada Bond Funds chalked up their 46th inflow over the past 12 months, and redemptions from Belgium Equity Funds hit a 60-week high. Mortgage Backed Bond Funds recorded their first outflow since mid-November, Aerospace & Defense Funds absorbed over $1 billion for the second week running and fifth time year-to-date and Artificial Intelligence (AI) Funds posted consecutive weekly outflows for the first time in over 16 months.
Emerging Markets Equity Funds
EPFR-tracked Emerging Markets Equity Funds narrowly extended their current inflow streak during the second week of March despite the first outflow from the diversified Global Emerging Markets (GEM) Equity Funds in over five months and the first back-to-back outflows from Frontier Markets Funds since late September. The week was marked by a significant rotation within the Asia ex-Japan Equity Fund universe, record setting flows into Leveraged EM Equity Funds and the biggest outflows from EMEA Equity Funds since mid-4Q24.
With memory chips in relatively short supply, investors flocked to Korea and Taiwan (Province of China) Equity Funds despite their dependence on imported oil. Flows into the former set a new weekly record while Taiwan (POC) Equity Funds took in over $3 billion for the second week running. Overseas investors took differing views of these markets, with foreign domiciled Korea Equity Funds posting their biggest inflow on record and foreign domiciled Taiwan (POC) Funds chalking up their biggest outflow since late 1Q25.
China Mainland and India Equity Funds, meanwhile, saw significant sums of money flow out. In the case of India-mandated funds, the redemptions were the largest since EPFR started tracking the group in 4Q00, eclipsing the previous record set in 1Q08 when the great financial crisis was roiling global asset markets. One fund accounted for roughly half of the headline number and 20 funds saw over $10 million redeemed as investors fretted about the inflationary risks rising oil prices pose to India which imports over 80% of what it uses.
EMEA Equity Funds, which encompass a universe of countries that include major oil producers and several of the combatants in the current conflicts centered on Ukraine and Iran, saw redemptions climb in early March. Funds dedicated to Turkey, a major oil importer that shares a border with Iran, posted their third straight outflow and biggest since 1Q23. But Israel Equity Funds attracted above average inflows as the military capabilities of the country’s principal enemy continue to erode.
Offering physical distance from the fighting and a non-OPEC oil story, Brazil again stood out in the Latin America Equity Fund universe. Dedicated Brazil Equity Funds took in over $150 million for the seventh week in a row.
Developed Markets Equity Funds
Despite the fraught backdrop, the week ending March 11 saw EPFR-tracked Developed Markets Equity Funds absorb fresh money for the seventh week running. Japan and Global Equity Funds anchored the latest week’s headline number and US, Canada and Australia Equity Funds also posted inflows.
Investors weighing the inflationary impact of oil prices that pushed towards $100 a barrel concluded that Europe, with its limited domestic production and dependence on shipborne oil and natural gas imports, is the most vulnerable. Europe Equity Funds posted their first outflow in over a month and second of the year so far, though France’s embrace of nuclear energy helped funds dedicated to that market post their biggest inflow since mid-December and Switzerland Equity Funds benefited from the country’s historic role as a port in global storms with flows hitting a level last seen in 2Q08.
Elsewhere, outflows were the norm with Spain, UK, Sweden, Norway and Germany Equity Funds all seeing over $100 million flow out. A recent report by CEIC economists explores “the potential return of natural-gas shocks that Europe might have thought it had solved…between the luck of warmer weather and an increased focus on seaborne liquefied natural gas imports, Europe replenished its reserves. But after a tough US winter in 2025-26, prices spiked, global markets tightened and Europe’s reserves have sunk back to 2022 levels. In Germany, reserves are even lower than they were before war broke out in Ukraine.”
In addition to Switzerland, investors looking for shelter turned to Japan. Equity Funds dedicated to that market absorbed over $6 billion, a number only exceeded once in mid-2Q13 when the Bank of Japan embraced ultra-accommodative monetary policies in order to break deflation’s grip on its economy. Japan Dividend Funds posted their 17th consecutive inflow and flows into retail share classes hit a 41-month high.
US Equity Funds continue to battle multiple headwinds in addition to the conflict with Iran. These include a deteriorating labor market, uncertainty about the systematic risks posed by private capital and rising producer prices. Redemptions from foreign domiciled US Equity Funds did jump to a 31-week high, but the overall group eked out a small collective inflow driven by Large Cap Blend Funds.
Global sector, Industry and Precious Metals Funds
For nine straight weeks, the number of EPFR-tracked Sector Fund groups posting inflows remained above seven. That streak came to end during the latest week as investors repositioned themselves in face of soaring crude oil prices and AI’s potential to disrupt profitable business models. Five groups reported inflows – ranging from $53 million for Commodities to $2.8 billion for Industrials Sector Funds – while six groups saw outflows.
Financials Sector Fund took in over $8 billion in the first five weeks of this year, but the most recent five weeks have seen nearly $8.2 billion redeemed, putting the group in negative territory with just over two weeks left in the first quarter. Redemptions from the group this week hit a record high, only just topping the previous one set in early 2Q25.
Also experiencing significant redemptions were Healthcare/Biotechnology Sector Funds, which endured their biggest outflows in 34 weeks. But data from CEIC, an ISI product, shows that active job postings have been climbing in recent weeks, especially in the health care and social assistance sector. As of the latest data to Mar 2, healthcare currently has the largest number of postings out of any sector, and those have been consistently increasing since mid-January.
Elsewhere, Energy Sector Funds absorbed over $1 billion on the first day of the reporting period, but the group ended the week with their biggest daily outflow since mid-December. The top six funds with the biggest outflows on that final day were all Oil & Gas related. Another energy-related group, Utilities Sector Funds, posted a fourth consecutive week of strong inflows, with China dedicated Electric Funds pulling the headline number up.
Bond and other Fixed Income Funds
Flows to EPFR-tracked Bond Funds lost momentum as March progressed and surging oil prices forced investors to revisit earlier assumptions about inflation and interest rates. But, although those investors continue to edge out of riskier asset classes and have lost – at least for now – their appetite for diversified global exposure, the overall group extended their current run of inflows to 46 straight weeks.
The latest outflow from Global Bond Funds hit funds with fully global mandates, while Global ex-US Bond Funds took in fresh money for the 31st straight week.
At the asset class level during the week ending March 11, Bank Loan Funds chalked up their biggest outflow in 11 months and Bond Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates recorded their second outflow of 2026. Inflation Protected Bond Funds tallied their sixth straight inflow and Total Return and Municipal Bond Funds extended their inflow streaks.
As was the case with their equity counterparts, Europe Bond Funds posted a collective outflow. It was their first since mid-August and biggest since mid-April, with Europe Corporate Bond Funds recording their biggest collective outflow in over 10 months. Retail share classes did pull in over $400 million while, at the country level, UK Bond Funds saw over $1 billion flow out.
Two Emerging Markets Bond Fund groups, China Mainland and Global Emerging Markets (GEM) Bond Funds, recorded outflows of over $1 billion. Europe domiciled EM Bond Funds surrendered $10 for every $1 pulled out of US-based funds.
US Bond Funds took in fresh money for their 46th week in a row, with flows tilting strongly towards funds with sovereign mandates. Foreign domiciled funds posted their third straight outflow.
With investors on the lookout for alternatives for US assets, Japan Bond Funds tallied their biggest inflow since mid-October. The Bank of Japan meets next week and is expected to keep its key rate on hold.
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