A U.S. and Chinese flag flutter outside Sweden’s government offices “Rosenbad” in Stockholm, Sweden, July 29, 2025, ahead of the second day of trade talks between China and the U.S., TT News Agency/via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY. SWEDEN OUT. NO COMMERCIAL OR EDITORIAL SALES IN SWEDEN.
Index Performance
At the close of LSEG Lipper’s fund-flows ending October 15, 2025, U.S. broad-based indices were mixed across the board: S&P 500 TR (+0.41%), Nasdaq (+0.66%), Russell 2000 (+0.97%), and DJIA (-0.04%).
Macro Viewpoint
Despite efforts to prevent a Tariff-War 3.0, tensions flared again between the United States and China surrounding rare earth metals. China produces nearly all of the world’s rare earth metals, which are used in items as varied as robotics, electric vehicles, and even aerospace engines.
But what happened this time? Earlier this year, China placed export restrictions on a few rare earth metals requiring exporters to have a license to export rare goods and placed steep regulation on what the metal could be used for. In the prior week, China expanded its export restrictions and added five more rare earth elements to its export controls list. The U.S responded by implementing an additional 100% tariff on China that would take place simultaneously during the face-to-face meeting between U.S. President Donald Trump and China’s President Xi Jinping. The market crumbled amid the news, with equities tumbling, yields falling, and the U.S. dollar on a marginal decline.
Fund Flows by Asset Type
The final race is here! All eyes are on the final heat, as investors reposition for the final quarter of 2025. U.S. equity funds led the charge with $2.4 billion in net inflows, closely behind were commodity funds, which attracted $2.3 billion, a steep increase from $776 million in the prior week. Within the fixed income universe, U.S, taxable bond funds drew $6.3 billion, a steep decline from the previous week’s impressive $18 billion net inflow. Municipal bond funds saw a more modest inflow of $678 million, a marginal decrease from $882 million in the prior week.
On the other side of the spectrum, the steam that propelled U.S. money market funds to the top of the leaderboards in the prior weeks has evaporated. U.S. money market funds recorded a sharp reversal of $21 billion in net outflows, a steep drop from the $14 billion in inflows reported the prior week. Alternative funds also finished in negative territory with $487 million in outflows. Meanwhile, U.S. mixed-assets funds showed early signs of stabilization, posting a smaller $119 million outflow versus $439 million the week before.
As the quarter unfolds, investors are rotating out of cash positions and into risk assets, signaling a renewed appetite for opportunity amid a shifting macro backdrop.
Performance by Lipper U.S. Classifications
– Equity
Within the equity universe, performance was driven by Precious Metals Equity Funds, which surged 7.45% as commodities rallied amid policy and political uncertainty. Alternative Energy Funds followed with a 4.35% gain, while Utility Funds advanced 2.14%, benefiting from investors rotating from growthier names to defensive names. On the downside, China Region Funds fell 3.16%, as tariff pressures continue to rise. Equity Leveraged Funds slipped 1.92%, and Global Large-Cap Growth Funds declined 0.87%.
– Fixed Income
Within the fixed income universe, performance was led by Corporate Debt A-Rated Funds, which advanced 0.73%, reflecting continued demand for quality credit. U.S. Mortgage funds also again 0.49%, while General Bond Funds followed with a 0.43%. On the opposite end of the spectrum, Loan Participation Funds slipped 0.04%, marking one of the few sub-asset classes in negative territory. Short Municipal Debt Funds had a marginal return of 0.06%, while Ultra-Short Obligation Funds ticked a little higher, with a 0.09%.
