The final week of December closed the books on a year that saw fund groups ranging from Europe Bond and Physical Silver to Cryptocurrency and Artificial Intelligence (AI) Funds set new full-year records. Investors also committed record-setting sums to Canada and Australia Equity and Bond Funds, Technology and Industrial Sector Funds, Physical Gold and Rare Earth Metals Funds and China Bond Funds.
Among the milestones in 2025 was the more than $2 trillion that flowed into all EPFR-tracked exchange-traded funds (ETFs), with flows into Equity ETFs hitting a pace that, if maintained, will see them hold more assets than actively managed Equity Funds by the end of the decade.
Although AI, digital assets and the European rearmament story dominated the broader market narrative for much of 2025, flows to funds offering exposure to those asset classes lost momentum as the year wound down. Another theme that resonated strongly earlier in the decade, socially responsible (SRI) or environmental, social and governance (ESG) investing, saw a major shift from SRI/ESG Equity Funds, which posted their biggest ever annual outflow, to Bond Funds with the same mandates.
Overall, EPFR-tracked Bond Funds collectively pulled in another $10.5 billion during the final week of December while Alternative Funds absorbed $1.2 billion, Equity Funds $42.2 billion and Money Market Funds over $80 billion.
At the single country and asset class fund levels, redemptions from Korea Bond Funds hit a 64-week high, Norway Bond Funds posted their fourth largest inflow of 2025, Canada Equity Funds recorded their first outflow since late August and Romania Equity Funds extended an inflow streak stretching back to mid-June. Cryptocurrency Funds chalked up their third straight outflow and sixth over the past nine weeks, flows into Copper Funds rebounded to a 13-week high and Water Funds tallied their 46th outflow of the year.
Emerging Markets Equity Funds
EPFR-tracked Emerging Markets Equity Funds carried their longest inflow streak since an 18-week run ended in early 4Q24 into the New Year as, for the second week running, all four of the major regional groups and Frontier Markets Equity Funds took in fresh money. EMEA Equity Funds ended the year with their biggest annual inflow since 2010 and Latin America Equity Funds since 2009.
The past year was a tough one for Leveraged EM Equity Funds, which posted their biggest ever annual outflow, but funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates swam against the global tide.
At the country level, funds dedicated to mainland China, Korea, India and Taiwan (Province of China) posted by far the biggest inflows. Korea Equity Funds attracted record setting amounts of fresh money as investors warmed to its technology and reform stories. When filtered by domicile, foreign domiciled Korea Equity Funds enjoyed the strongest support while redemptions from overseas domiciled India Equity Funds were the biggest since 2020.
December ended with funds dedicated to smaller Asian markets enjoying a pick-up in flows. During the latest week, Vietnam and Thailand Equity Funds snapped 12-week outflow streaks and Indonesia Equity Funds posted their fifth consecutive inflow.
EMEA Equity Funds recorded their 43rd inflow of the year, with South Africa Equity Funds posting their 22nd inflow over the past 24 weeks and Saudi Arabia Equity Funds attracting fresh money despite the country’s growing involvement in Yemen’s civil war. But Turkey’s depreciating currency and fears that policymakers are losing their appetite for combating inflation, still running north of 30%, saw Turkey Equity Funds end the year with their eighth consecutive outflow.
Flows to Latin America Equity Funds continue to favor Brazil and regionally mandated funds. However, Colombia currently tops EPFR’s weekly Emerging Markets rankings, which utilize flows from funds with cross-border mandates, with Chile in third place while Mexico and Brazil are both in the middle of the pack.
Developed Markets Equity Funds
With the latest round of ex-dividend payments being reinvested, EPFR-tracked Developed Markets Equity Funds ended 2025 with their 46th inflow of the year. Those flows came against a backdrop that included multiple record highs for benchmark indexes including the Dow Jones Industrials, Nikkei 225, FTSE 100, DAX, S&P 500 and Euro Stoxx 50.
The latest week saw Europe Equity Funds post their biggest inflow since early May, capping a year that netted the largest amount of fresh money since 2015 as investors bought into the continent’s rearmament and German stimulus stories and the outlook for the major Mediterranean economies. At the country level, impatience with the pace of the shifts in German economic policy, the British governments increased taxation of businesses to fund the public sector and France’s political dysfunction were reflected in the outflows recorded by Germany, UK and France Equity Funds.
US Equity Funds absorbed over $30 billion, with the bulk of that money going to Large Cap Blend Funds. As Senior Liquidity Analyst Winston Chua noted in a recent report, “Inflows [to US Large Cap Funds] proved resilient in 2025, persisting — and even accelerating — through volatile periods in March and April. But US Small Cap Funds, typically more exposed to domestic growth and refinancing risk, were disproportionately penalized as investors prioritized the liquidity and safety of bigger names.”
Reinforcing the perception that safety was the dominant consideration for many US-oriented investors, Leveraged US Equity Funds ended 2025 with their fourth outflow over the past five weeks even though they delivered significantly stronger performance than their regular counterparts over the course of the year.
Flows to the major Asia Pacific Fund groups were generally (a) modest and (b) positive, with Japan Equity Funds posting a third straight inflow for the first time since late September and Australia Equity Funds chalking up their 12th straight inflow. Allocations to technology plays among this group continue to lag US Equity Funds, which allocate 34% of the average portfolio to this sector compared to 10.2%, 16.7% and 21.4% for Singapore, Japan, and Pacific Regional Equity Funds, respectively.
Global Equity Funds, the largest of the major diversified Developed Markets Equity Fund groups, pulled in nearly $7 billion with the biggest share of that going to funds with fully global mandates. But full-year flows for both Global and Global ex-US Equity Funds fell well short of the records set in 2021.
Global sector, Industry and Precious Metals Funds
Although Technology Sector Funds ended 2025 as the top money magnets among the 11 major EPFR-tracked Sector Fund groups, they limped rather than stormed into the New Year with four outflows over the final five weeks. But dedicated Artificial Intelligence Funds did post their fifth straight inflow.
The groups in second and third place fared better, with Industrial Sector Funds posting their 36th inflow since the beginning of 2Q25 and flows into Financial Sector Funds hitting an 11-week high. In the case of Industrial Sector Funds, they have so far weathered the reappraisal of the global rearmament story that has seen Aerospace & Defense Funds post outflows six of the past seven weeks after they recorded only two outflows between the beginning of the year and mid-November.
In terms of momentum, Commodities and Infrastructure Sector Funds led the way with the former taking in fresh money 14 of the year’s final 18 weeks while Infrastructure Sector Funds extended their longest run of inflows since EPFR started tracking the group in 2003.
Commodities Sector Funds are benefiting from investor appetite for exposure to precious metals such as gold, silver and platinum – all of which saw their price hit record highs in 2025 – and materials such as copper and uranium needed to build and power data centers. Infrastructure Sector Funds also offer a way to benefit from the huge sums being spent on those centers.
Among the groups posting outflows during the final week of the year were Consumer Goods Sector Funds, which have come under pressure as inflation, taxes, a weaker labor market, tariffs and higher debt levels have sapped consumer confidence and spending in key markets.
Bond and other Fixed Income Funds
EPFR-tracked Bond Funds ended the year with another inflow that took their total for 2025 past the $950 billion mark. That record-setting total came despite alarming sovereign debt dynamics in Europe, the US and some emerging markets and corporate bankruptcies in the US hitting a 15-year high. During the final week of December, Europe and US Bond Funds posted their 48th and 49th inflow of the year, respectively, while Australia Bond Funds extended an inflow streak that started in the second week of May and Emerging Markets Bond Funds added to their biggest annual inflow since 2017.
At the asset class level, Municipal Bond Funds tallied their biggest outflow since early June, High Yield Bond Funds saw a five-week run of inflows come to an end and Convertible Bond Funds experienced net redemptions for the ninth time during the year’s final quarter. Flows into Inflation Protected and Bank Loan Funds rebounded to five and 12-week highs, respectively, and Bond Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates absorbed over $1.4 billion.
The final headline number of the year for US Bond Funds was lackluster, with US Sovereign Bond Funds chalking up their biggest outflow since mid-3Q22, but it was enough to extend the overall groups current inflow streak to 35 straight weeks. Foreign domiciled funds last posted an outflow in mid-June, but retail support faltered during the final two months of the year.
Mainland China-mandated Bond Funds again drove the flows into all Emerging Markets Bond Funds, which set a new full-year inflow record. For the second week running eight of the 10 China Corporate Bond Funds ranked by inflows specialize in investment grade debt issued by science and technology innovators. But actively managed Global Emerging Markets (GEM) Bond Funds continue to keep their China exposure below its pre-pandemic levels.
Europe Bond Funds with corporate mandates took in $5 for every $1 committed to their sovereign counterparts during the final week of December. At the country and regional fund level, collective performance for 2025 ranged from -4.7% for Germany Bond Funds to +5.1% for Norway Bond Funds.
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