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February 13, 2024 | Last updated April 17, 2025

By Morningstar Manager Research

Blog

5 min read

US Fund Flows: March Sees Investors Seek Shelter, with Cautious Sector Equity Bets

US fund flows in March show a flight to safety, with bond funds and money markets attracting assets while equities see continued outflows.

Key Takeaways

  • Long-term US mutual funds and exchange-traded funds took in just $24 billion in March 2025, their weakest showing since April 2024.

  • US equity funds gathered just $5.7 billion, with dividend-focused strategies being the bright spot amid broader weakness.

  • Amid market volatility, investors gravitated toward defensive sector-equity funds in March. They also plowed into gold funds at a rate last seen in 2020.

Market Volatility Hits Flows in March

Amid growing uncertainty around the trajectory of the US and global economies, investors pulled back purchases of long-term US open-end funds and exchange-traded funds. Just $24 billion made their way into these vehicles in March, the lowest total since April 2024. Five of the 10 category groups suffered outflows.

The charts below illustrate which direction the money is flowing for a variety of fund types. For a more complete analysis, download the full monthly report from Morningstar’s Adam Sabban and Ryan Jackson. 

This data was sourced from Morningstar Direct. Not a user? Get a free trial of Direct. 

Source: Morningstar Direct Asset Flows. Data as of March 31, 2025.

How Morningstar Analysts Assess Fund Flows

Most US Equity Categories Suffer Outflows in March

US equity funds took in a paltry $5.7 billion in March. Outflows from six of the nine categories nearly outweighed the usual flows into passive large-blend funds and notable flows into large-value funds. Dividend-oriented funds such as Schwab US Dividend Equity ETF gave the large-value category a boost. The broader dividend-fund basket, which includes dividend-growth funds, took in $5.6 billion in March, a strong relative showing more reminiscent of 2022’s environment.

Source: Morningstar Direct Asset Flows. Data as of March 31, 2025.

Investors Head Toward Safety Within Sector-Equity Funds

As a whole, sector-equity funds had a rough March, shedding more than $11 billion. Just three of the 16 categories enjoyed inflows. Utilities and consumer defensive funds were the only cohorts to receive meaningful inflows, with utilities’ $1.3 billion by far the largest in the category group. Conversely, consumer cyclical and communications funds suffered the steepest outflows relative to their asset bases in March as trade tensions picked up.

Source: Morningstar Direct Asset Flows. Data as of March 31, 2025

Bond Fund Rebound as Inflows Top Charts

Investors have piled into bond funds since the start of 2023, a welcome trend for the firms that specialize in managing them. The four below stash more than half their $100- billion-plus asset bases in taxable-bond funds. It looked grim for these providers when investors pulled out of bonds in 2022, but they have since bounced back. All four notched solid inflows in 2024 and collected first-quarter flows that ranked in the top 25 among all fund families.

Source: Morningstar Direct Asset Flows. Data as of March 31, 2025.

More on Fund Flows from Morningstar

For more comprehensive analysis and commentary on US Fund Flows, download this month’s full report.

Additional topics include: 

  • Active/passive flows by US category group 

  • Flows for the largest fund families 

  • Government bond fund and money market flows  

Can’t get enough fund flows data? Check out Morningstar’s Ultimate Guide to Fund Flows. 

Unsure about the future of active management? Check out this insightful article from a Morningstar analyst.

This article is adapted from the Morningstar U.S. Fund Flows report for March 2025.Download the full report here. 

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Note: The figures in this report were compiled on Feb. 28, 2025, and reflect only the funds that had reported net assets by that date. The figures in both the commentary and the extended tables are survivorship-bias-free. This report includes both mutual funds and exchange-traded funds but not funds of funds unless specifically stated. It does not include collective investment trusts or separate accounts. Important methodology note: Morningstar computes flows using the standard approach in the industry: Net flow is the estimated change in assets not explained by the performance of the fund. Our method assumes that flows occur uniformly over the course of the month. Adjustments for mergers are performed automatically. When liquidated funds are included, the fund's final assets are counted as outflows. Reinvested dividends are not counted as inflows. We use fund-level reinvestment rates to improve accuracy in this respect. We make ad hoc adjustments for unusual corporate actions such as reverse share splits, and we overwrite our estimates with actual flows if managers are willing to provide the data to us. When possible, Morningstar offsets outflows caused by transfers to other investment vehicles that share an identical mandate since they are not indicative of a change in investor interest.