Index Performance
At the close of Refinitiv Lipper’s fund-flows week ending August 6, 2025, U.S. broad-based equity indices traded positive: S&P 500 (+1.64%), Nasdaq (+3.88%), Russell 2000 (+2.58%), and DJIA (+0.9%). The Bloomberg U.S. Aggregate Bond Total Return Index is back in the green, as the index appreciate 2.39%.
Macro Viewpoint
Trade frictions between the U.S. and India escalated sharply this week, derailing months of negotiations. New Delhi had anticipated a tariff framework broadly in line with concessions granted to Japan and the European Union. Instead, President Trump imposed and additional 25% ad valorem tax on Indian imports, doubling the effective rate to 50%. The White House cited India’s continued purchase of Russian oil, which accounts for nearly a third of India’s oil imports as the rationale, linking energy trade to a broader geopolitical alignment. This move marks a significant blow to bilateral relations and adds uncertainty into an already complex global trade backdrop. Indian Prime Minister Narendra Modi has dismissed this action as a “show of power” and labeled the tariffs unjustified. All eyes are watching closely for New Delhi’s response for retaliation or with a plan to discontinue trade relationships with Russia.
Fund Flows by Asset Type
Investor flows over the past week signaled a decisive shift in positioning compared to the prior period. Money Market Funds dominated, attracting an impressive $78,314.56 million in fresh capital as investors sought safety amid mounting uncertainty. Fixed Income strategies also saw renewed interest, drawing $6,158.31 million, while Alternatives and Commodities posted more modest inflows of $242.19 million and $65.48 million, respectively. Conversely, Equities saw net out flows of $12,234.72 million, signaling a pullback in risk appetite as investors grew increasingly wary of a potential economic slowdown. Mixed Assets experienced modest redemptions, totaling just $59 million. These flow patterns show a defensive rotation, with investors rebalancing towards cash and high-quality fixed income while trimming exposure to growth-sensitive asset classes.
Performance by Lipper U.S. Classifications
Within the equity universe, performance was led by segments benefiting from favorable macro tailwinds. International Small/Mid Cap Value (+2.35%) advanced on the back of attractive valuations and positive inflows into undervalued Developed ex-U.S. countries. Japanese Funds (+2.80%) extended gains as corporate governance reforms continues to attract global investors. Frontier Markets (+3.0%) outperformed amid improving risk sentiment in select emerging economics. Global Financial Funds (+2.10%) rose as global yield curves steepened. Meanwhile, Precious Metals Equity soared (+9.40%), fueled by a sharp rally in gold prices as investors rotated into commodities to hedge against heightened geopolitical uncertainty. On the downside, India Region (-1.39%) lagged amid trade conflicts with the U.S. and Equity Leverage (-2.65%) faced pressures from risk-off positioning.
Within the fixed income universe, gains were led by U.S. Government & Treasury Funds (+1.11%), supported by economic data pricing in a potential easing in the later part of the year. National Muni Debt (+0.87%) and Single State Muni Debt (+0.69%) also had favorable gains. Short/Intermediate IG Debt (+0.74%) and Domestic Fixed Income (+0.60%) delivered broad gains across core sectors. On the weaker end, Alternative Bond strategies posted the lowest return (-0.81%), while U.S. High Yield delivered a modest gain (+0.24%).
