Global Navigator | Money keeps flowing despite Hormuz setback

Although the first week of July ended with the US and Iran exchanging missile and drone strikes, flows to EPFR-tracked funds suggested unbroken faith that the worst of the conflict is over. Equity Funds started the third quarter with their fourth largest inflow of the year, investors steered another $31 billion into Bond Funds, Balanced Funds took in fresh money for the sixth straight week and Alternative Funds, which ended June with their smallest quarterly inflow since 4Q23, saw their longest outflow streak in over two years come to an end.

The third quarter started with another surge of money into Semiconductor and Artificial Intelligence Funds, the first positive flows for Chinese Mainland Equity Funds since late March, Leveraged Equity Funds posting a fifth straight inflow for the first time since early 2Q25 and Inflation Protected Bond Funds extending their longest inflow streak since a 55-week run ended in late 4Q21.

Increased tanker traffic through the Straits of Hormuz helped the price of WTI crude oil slip below $70 a barrel during the first week of July before climbing in tandem with renewed hostilities between Iran and the US. That prevented investors from pushing the impacts of the energy price shock that started in March to the back of their minds. Funds dedicated to two of the hedges used during the post-Covid inflation spike saw flows pick up. Physical Gold and Cryptocurrency Funds snapped their longest run of outflows since 1Q24 and 2Q23, respectively. At the single country and asset class fund levels, Thailand Equity Funds saw money flow out for 127^th time over the past two-and-a-half years, Chinese Mainland Bond Funds tallied their biggest outflow since early April and Canada Equity Funds tallied their second-largest inflow on record. Coal Funds posted their largest weekly inflow since EPFR started tracking them, Collateralized Loan Obligation (CLO) Funds extended a run of inflows stretching back to early March, flows into Private Credit Funds climbed to a 13-week high and Bear Funds posted a fifth straight outflow for the first time in over 30 months.