A month after the US bombed Iran’s nuclear facilities last June, major US indexes were hitting fresh record highs, Japan’s Nikkei-225 had climbed past the 41,000 point mark, the price of a barrel of WTI oil had fallen back below $70 and the price of gold was marginally higher than it was two days before the strike.
Flows to EPFR-tracked funds during the latest week, when the US launched a sustained attack against Iran, suggest that investors are wary of overreacting to something that could burn itself out in relatively short order. The week ending March 4 saw unexceptional flows into Money Market and outflows from Physical Gold Funds while Leveraged Equity and Cryptocurrency Funds attracted solid amounts of fresh money and redemptions from US Equity, Bank Loan and High Yield Bond Funds came in at between 0.1% and 0.5% of AUM.
Some fund groups did attract flows in keeping with the conventional response to geopolitical shocks in the Middle East. Energy Sector Funds posted a new weekly record and flows into Japan Equity Funds jumped to an 18-week high while fund groups dedicated to oil importers like Turkey struggled. Investors remained committed to diversification, with Global and Global Emerging Markets (GEM) Equity and Bond Funds pulling in a collective $18.3 billion, and they steered over $1.5 billion into Aerospace & Defense Funds.
Overall, EPFR-tracked Equity Funds took in less than a third of the previous week’s total during the latest reporting period while Balanced Funds absorbed $1.1 billion, Alternative Funds $2.4 billion, Money Market Funds $5.6 billion and Bond Funds $19.6 billion.
At the asset class and single country fund levels, flows into Rare Earths Funds climbed to a 20-week high, Cryptocurrency Funds posted their biggest inflow in five months and Inflation Protected Bond Funds narrowly extended their longest inflow streak since late 3Q25. Redemptions from Turkey Money Market Funds hit a level last seen 11 months ago while Ireland Equity Funds chalked up their biggest inflow since early 2Q23 and Russia Bond Funds their biggest since late 4Q20.
Emerging Markets Equity Funds
Solid flows into the diversified Global Emerging Markets (GEM) Equity Funds and four single country groups allowed EPFR-tracked Emerging Markets Equity Funds to post their seventh inflow of the year in early March. The fresh money came despite the US-Israeli attack on Iran, which delivered a global energy price shock, and further uncertainty about US tariff rates.
The week ending March 4 saw Leveraged EM Equity Funds extend their longest run of inflows since 4Q24 and EM Bear Funds post their seventh inflow of the year while Frontier Markets Equity Funds tallied their first outflow in five weeks.
With the Lunar New Year holiday in mainland China winding down, funds dedicated to that market posted their biggest weekly inflow since the second week of January. Investors also gravitated to Taiwan (Province of China) Equity Funds as the island’s integral role in the computing power needed to develop artificial intelligence (AI) allows them to diversify out of expensive US names. The latest week’s inflow was the largest in nearly two years.
Korea Equity Funds, which had held center stage among Asia ex-Japan Country Fund groups when it came to inflows over the past two months, took in fresh money for the eighth straight week. But strong inflows mid-week steadily reversed in the face of the country’s dependence on imported oil and a sharply correcting domestic market.
Among the major Latin America Equity Fund groups, those dedicated to Brazil contributed the most to this week’s headline number. Brazil’s central bank has signaled it will likely start cutting interest rates from their current 20-year high at its March policy meeting.
With two members of the EMEA universe exchanging missiles and Iran trying to drag others into the conflict by hitting them with missiles and drones, EMEA Equity Funds recorded their first collective outflow since mid-December. Redemptions from Turkey and Romania Equity Funds hit their highest level since 4Q23 and 1Q10, respectively, with the latter seeing a 34-week inflow streak coming to an end.
Developed Markets Equity Funds
EPFR-tracked Developed Markets Equity Funds started March with their sixth straight inflow as commitments to Europe, Japan, Global and Canada Equity Funds offset the more than $12 billion pulled out of US Equity Funds. Although the US attack on Iran dominated the headlines, markets were already wrestling with multiple headwinds ranging from fears of an artificial intelligence (AI) bubble to yet another tariff reset following the US Supreme Courts rebuff of President Donald Trump.
Of the major US Equity Fund groups by capitalization and investment style, only Large Cap Value and Mid Cap Blend Funds posted inflows while over $15 billion flowed out of Large Cap Blend Funds. Redemptions from retail share classes climbed to an 11-week high, but Leveraged US Equity Funds tallied their second biggest inflow since mid-November. Several of those leveraged funds were among the week’s best performers, with two 3x leveraged funds at the top of the list.
Conventional overseas domiciled US Equity Funds eked out a modest collective inflow, their 14th over the past 15 weeks. But foreign based US Equity Hedge Funds have been struggling to attract fresh money since the first quarter of last year.
Investors looking for alternatives to the US took another look at Japan despite its dependency on imported oil, with Japan Equity Funds posting their biggest inflow in four months. Foreign domiciled funds racked up their second weekly inflow record since mid-January, with the new government’s plans for more fiscal stimulus now viewed as a buffer from the fallout from the latest US-Iranian clash. Australia Equity Funds also attracted fresh money as investors penciled in higher energy exports to regional markets.
The largest of the major diversified Developed Markets Equity Fund groups, Global Equity Funds, continued their strong start to the year as funds with fully global mandates took in over $2 for every $1 committed to their ex-US counterparts.
Global sector, Industry and Precious Metals Funds
Attention among sector-oriented investors in early March shifted, but not entirely, from the disruptive AI story to the escalation of US-Israel strikes on Iran. During the week ending March 4, there were impressive inflows across the board. Those reached above $6 billion for Energy Sector Funds, above $4 billion for Technology Sector Funds, above $3 billion for both Commodities and Industrials Sector Funds, and $1 billion for Infrastructure Sector Funds (third largest on record). Four groups posted outflows, with Financials Sector Funds again the hardest hit among the groups.
The flows seen by Energy Sector Funds topped their previous record set in 2008, putting their current 11-week inflow streak at over $20 billion. Oil & Gas Funds supported the headline number, posting a collective inflow of $4.36 billion which surpassed their previous inflow record set in late April 2020. Of the funds with the biggest inflows in the latest week, six of the top 10 were China-domiciled ETFs benchmarked to CSI or CNI Oil & Gas indices which accounted for 70% of that headline figure.
Of the remaining total, short only (or bear) WTI Funds posted an eighth consecutive weekly inflow and their biggest since mid-June following Iran’s June 13 attack on Israel. Bear flows accounted for a third of All WTI Funds’ inflow of nearly $400 million this week. Meanwhile, flows into Leveraged Natural Gas Funds offset outflows from their bear counterparts.
Inflows to Technology Sector Funds were dominated by leveraged 2x and 3x ETFs, which collectively absorbed over $3 billion this week. All Leveraged Tech ETFs posted their fourth inflow over the past 12 weeks, and the biggest since early 2Q25. A fund bullish on semiconductors took the lion’s share, followed by those tracking Nvidia and SK Hynix.
Turning to Infrastructure Sector Funds, a single fund tracking a benchmark for the smart grid and electric infrastructure sector [NASDAQ QMX Clean Edge Smart Grid Infrastructure] has ranked the highest among all funds receiving inflows for Infrastructure Sector Funds in seven of the nine weeks year-to-date.
Bond and other Fixed Income Funds
Another $19.6 billion flowed into EPFR-tracked Bond Funds during the latest reporting period as investors trimmed their exposure to corporate credit and duration risk but accepted the broader risks posed by energy price-driven inflation and historically high sovereign debt-to-GDP ratios. Year-to-date through March 4, the overall group has pulled in over $220 billion – over 27% of 2025’s record-setting full-year total – while maintaining an inflow streak stretching back to the fourth week of April.
Among the diversified Bond Fund groups that report their country weightings to EPFR, cash allocations have climbed over the past year for a majority but remain well off their peak highs during the current decade.
At the asset class level, Bank Loan Funds posted consecutive weekly outflows for the first time this year and High Yield Bond Funds for the first time since mid-October. Municipal Bond and Total Return Bond Funds added to their current inflow streaks and Convertible Bond Funds took in fresh money for the eighth time so far this year.
US Bond Funds recorded their 45th consecutive inflow during the latest week as the yield on 10-year Treasuries slipped below 4%. Long Term Sovereign Funds had their best week, in flow terms, since mid-November but funds domiciled overseas posted consecutive weekly outflows for the first time since 2Q25 when investors were responding to the ‘Liberation Day’ tariffs.
Flows to Emerging Markets Bond Funds held up with the diversified Global Emerging Markets (GEM) Bond Funds again driving the headline number. Frontier Markets Bond Funds posted their first outflow in nearly five months and investors expressed strong convictions at the country level. Flows into Mexico and Russia Bond Funds hit record-setting levels, Brazil Bond Funds recorded their 22nd consecutive inflows, while over $1 billion was pulled out of Chinese mainland-mandated funds and redemptions from Turkey Bond Funds climbed to a 48-week high.
Europe Bond Funds attracted solid inflows that favored sovereign mandated funds by a more than two-to-one margin over their corporate counterparts. Intermediate was the preferred duration and Switzerland and Denmark the preferred markets.
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