March ends with a whimper, April starts with a modest roar

Going into the final day of the latest reporting period, which ended April 1, flows for EPFR-tracked mutual funds and ETFs had a nowhere-to-hide quality, with redemptions the norm and flows to previously popular fund groups losing momentum. But a burst of optimism about an end to the current conflict in the Middle East, stemming from the belief that both US President Donald Trump and Iran’s leadership want the war to end soon, saw a surge of fresh money into global markets and several fund groups.

Among the groups lifted from outflow to inflow during the final day were US Equity, Municipal Bond, US Money Market, Total Return, GEM Equity, US Bond, and Latin America Equity Funds. Several of those groups feature on the list of the top 20 when it comes to attracting fresh money since the Iran conflict intensified at the end of February, which also includes Japan, Switzerland, Mainland China, Korea, Canada, and Latin America mandated funds.

Bullish investors also steered over $4 billion into Leveraged Equity Funds, upped their exposure to private credit and collateralized loan obligations (CLOs) and pumped nearly $2 billion into Technology Sector Funds. Those with a more defensive outlook bought into Bear and Inflation Protected Bond Funds, continued cutting their exposure to cryptocurrencies, the financial sector, and junk bonds and returned to Physical Gold Funds.

Overall, the final week of the first quarter saw all EPFR-tracked Equity Funds post a collective inflow of $11.5 billion while Alternative Funds absorbed $1.6 billion and Bond Funds $3.3 billion. Investors pulled a net $1.9 billion out of Money Market Funds and $2.1 billion out of Balanced Funds.

At the single country fund level, Turkey Money Markets Funds posted their fifth straight outflow and South Africa Money Market Funds their biggest since late December, redemptions from Vietnam Equity Funds hit a 10-week high, and France Equity Funds extended their longest run of consecutive inflows since 3Q24.

Emerging Markets Equity Funds

EPFR-tracked Emerging Markets Equity Funds ended March with their fifth outflow year-to-date as Mainland China-mandated funds saw over $6 billion flow out and India Equity Funds chalked up their sixth straight outflow. Latin America Equity Funds did extend a run of inflows stretching back to the second week of January and the diversified Global Emerging Markets (GEM) Equity Funds snapped their longest redemption streak since early 2Q25.

Investors steered another $700 million into EM Dividend Funds and regained their appetite for leveraged exposure with 2x funds seeing the biggest inflows. But funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates posted their biggest outflow since the second week of January.

Flows into fund groups with an Asian focus continued to rotate from Mainland China, India and Thailand mandated funds to Korea, Taiwan (Province of China) and GEM ex-China Equity Funds. In the case of Mainland China Equity Funds, the redemptions from overseas domiciled funds hit a 50-week high while, for the second week running, flows into GEM ex-China Equity Funds hit a level last seen in late 1Q24.

Latin America Equity Funds extended their current inflow streak, with the headline driven largely by the fresh money committed to regional funds. Brazil Equity Funds posted their first outflow since early January and Mexico Equity Funds tallied their eighth weekly outflow so far this year. In the case of Brazil, the optimism triggered by last month’s interest rate cut has faded in light of still tight credit conditions for businesses and the likelihood the spill over from the Iran conflict will make it harder for Brazil’s central bank to keep cutting rates.

Among the fund groups in the EMEA universe, Israel Equity Funds continue to stand out as US strikes weaken Iran and its regional proxies. But funds dedicated to significant oil importers continue to struggle. Turkey Equity Funds posted their sixth straight outflow as the country’s central bank sells gold to meet import bills and South Africa Equity Funds extended their longest redemption streak since 2Q25.

Developed Markets Equity Funds

A rebound in flows to US Equity Funds during the final week of March lifted all EPFR-tracked Developed Markets Equity Funds to their 10th inflow of the first quarter. While hopes that the US will wind down its assault on Iran provided an immediate tailwind for American – and to a lesser degree Canadian – assets, it diminished the appeal of Japan and Global ex-US Equity Funds, and investors remain leery of Europe’s ability to navigate the current energy shock.

In the case of Global Equity Funds, the largest of the diversified Developed Markets Equity Fund groups, those with fully global mandates took in $3 for every $1 committed to their ex-US counterparts. Global ex-US Funds did, however, post their 50th inflow over the past 12 months. Of the more than $90 billion absorbed by ex-US funds during that period, over two-thirds went to funds domiciled in the US.

US Equity Funds based overseas saw inflows climb to a 12-week high, accounting for half of the headline number for all funds. Retail share classes remain unloved, posting their 34th consecutive outflow, but US companies remain heavily committed to supporting their own share prices. According to Senior Liquidity Analyst Winston Chua, “corporate buybacks in 1Q26 reached $395 billion — one of the highest first-quarter totals on record and the fourth largest of any quarter since 2009.”

Technology companies were the most active, shrinking their collective free float by $173 billion. “Large software firms, including Salesforce, expanded buybacks to offset valuation pressure, support investor sentiment, and reinforce confidence in their product roadmaps,” noted Chua.

Europe Equity Funds remained under pressure from perceptions that policymakers will react to, rather than get ahead, of the economic threats posed by the conflict between Iran and the US. The latest week saw overall redemptions hit a 119-week high, with Switzerland and Sweden Equity Funds the only groups to tally meaningful inflows while Germany Equity Funds posted their biggest outflow since late October.

After seven weeks of inflows, Japan Equity Funds chalked up an outflow as foreign investors focused on the country’s dependence on imported energy. The cost of US$ denominated oil is exacerbated by the current weakness of the Japanese yen, and some observers fear that the world’s fourth-largest economy may experience stagflation on the second half of this year.

Global Sector, Industry and Precious Metals Funds

During the final week of 1Q26 sectors categorized as cyclical posted net inflows of $3.5 billion as solid flows into both Technology and Energy Sector Funds offset redemptions of $1.8 billion from Financials Sector Funds. But, for the first time in 37 weeks, defensive sector fund groups racked up a second consecutive week of outflows. Overall, six of the 11 major EPFR-tracked Sector Fund groups absorbed fresh money this week.

Four of those Sector Fund groups are on track for record quarterly inflows. Energy and Infrastructure Sector Funds have taken in over $26.6 billion and nearly $7 billion year-to-date, the biggest quarters since 1Q21 and 2Q22, respectively. And both Commodities/Materials and Industrials Sector Funds have more than doubled their previous records set just two quarters ago in 3Q25, absorbing $27 and nearly $29 billion, respectively.

Commodities/Materials Sector Funds snapped a two-week outflow streak, posting their 16th inflow over the past four months. Gold and Silver Mining Funds did not back the headline number, both tacking on a fourth consecutive weekly net outflow. Another major commodity group, Agriculture Funds, has seen their assets climb to nearly $7 billion in total. That represents funds tracking soybean, corn and wheat and grain futures among other crops in the alternative universe, and on the equity, front includes funds tracking agribusinesses. Year-to-date, all Agriculture Funds have attracted inflows over $2.5 billion.

Flows for Physical Gold Funds – which are also tracked in EPFR’s Alternative universe – have been choppy since February. January saw a record $21.8 billion flow in, while February’s total was less than a third of that. Daily cumulative flows for March reveal an outflow north of $10 billion, which would mark the first monthly outflow since May last year, and an all-time high, surpassing the previous record of $8.7 billion in April 2013. In the latest week, however, the group did return to positive territory.

Leveraged funds helped the overall Technology Sector Fund group post a four-week high inflow and their eighth inflow in the past 10 weeks. A single Semiconductor 3x Leveraged ETF accounted for over half of the headline number this week, followed by ones with software and artificial intelligence mandates.

Bond and other Fixed Income Funds

After 44 straight weeks when the headline number for all EPFR-tracked Bond Funds never fell below $5 billion, the group ended March by pulling in less than $4 billion for the third time over the past four weeks. Longstanding concerns about sovereign debt levels, the systematic risks posed by private credit and the surge in AI-related borrowing by technology majors have been brought into sharper focus by the energy shock the latest US-Iran conflict has triggered. If that shock pushes major economies in stagflation, the thinking goes, these concerns may be realized.

During the week ending April 1, investors continued to cut their exposure to high yield and European debt. US Bond Funds, which were staring at their first weekly outflow since the third week of 2Q25 on March 31, saw nearly $8 billion flow in on the first day of April as investors responded to short-lived hopes of an early end to hostilities.

At the asset class level, redemptions from Bond Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates climbed to a 49-week high. But most of the other groups, including Collateralized Loan Obligation (CLO) Bond Funds recorded inflows. Municipal and Mortgage Backed Bond Funds rebounded from the previous week’s outflow and Inflation Protected Bond Funds tallied their eighth consecutive inflow.

Emerging Markets Bond Funds posted a small outflow as money flowed out of hard currency mandated funds and EM Local Currency Funds recorded their biggest inflow since the first week of the year.At the country level, Mainland China Bond Funds posted their largest headline number year-to-date, with funds dedicated to corporate debt taking in nine times the amount committed to their sovereign counterparts.

US Bond Funds chalked up their 49th consecutive outflow, with Short Term Sovereign Funds absorbing the bulk of the fresh money during a week when the yield on 10-year Treasuries hit 4.4%. Retail share classes experienced their heaviest redemptions since mid-January while overseas domiciled funds posted their first inflow since mid-February and their biggest since the third week of January.

Among the Europe Bond Fund groups, flows ranged from an inflow of $341 million for Germany Bond Funds to an outflow of over $1.5 billion for Europe ex-UK Regional Bond Funds.