Skip to Content

February 13, 2024 | Last updated April 17, 2025

By Morningstar Manager Research

Blog

5 min read

US Fund Flows: In April, Fund Investors Took a Hard Turn Toward Caution

Tension over new tariffs and recession jitters sent investors running for cover.

Key Takeaways

  • Perhaps spooked by talk of tariffs and recession, long-term US mutual funds and exchange-traded funds suffered outflows of $46 billion in April 2025, their worst showing since October 2023’s $50 billion withdrawal.

  • Taxable-bond funds had their worst month of organic growth since mid-2022, as they shed $43 billion

  • Funds that help investors diversify their assets, such as those in the alternatives, commodities, and nontraditional equity category groups, enjoyed healthy inflows in April.

Tariff Trouble Rocks US Fund Flows

US President Donald Trump’s announcement of a broad regime of tariffs on April 2 sent markets tumbling. Fund investors responded by pulling $46 billion from long-term US open-end funds and ETFs during the month. Five of the 10 category groups suffered outflows, with active strategies bearing the brunt of the exodus: They suffered $82 billion of outflows, while passive strategies took in $36 billion.

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 April 30, 2025.

How Morningstar Analysts Assess Fund Flows

Bailing on Bonds

Bond-fund investors ran toward the exits at a rate last seen in 2022. Taxable-bond funds saw $43 billion leave in April, their largest outflow since March 2020 and equivalent to their worst monthly organic growth rate since June 2022. Intermediate-core bond funds were responsible for roughly half of the outflows, though much of that came from rebalancing activity around a single large Vanguard fund.

Source: Morningstar Direct Asset Flows. Data as of April 30, 2025.

Diversifying Funds Stood Out in April

Amid broader concerns across the equity and fixed-income markets, funds offering differentiated risk characteristics fared well. Alternative funds took in $3.6 billion, mostly driven by flows into digital assets funds. Commodities funds gathered $5 billion (mostly driven by flows into gold ETFs), and nontraditional equity funds enjoyed their usual inflows to covered-call and defined-outcome products.

Source: Morningstar Direct Asset Flows. Data as of April 30, 2025.

No End in Sight for Sustainable Fund Outflows

Sustainable fund outflows topped $4 billion in April, their worst showing since January 2024, when they dropped just over $5 billion. It has been nearly two years since sustainable funds saw a monthly inflow. They dropped roughly $20 billion over the trailing 12 months. All category groups within the sustainable cohort suffered outflows in April except for municipal-bond funds.

Source: Morningstar Direct. Data as of April 30, 2025. Comprises funds deemed to have sustainability mandates by Morningstar based on prospectus language.

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 April 2025.Download the full report here. 

Start a free trial of Morningstar Direct and evaluate fund flow data your way.  

Download the Free Monthly Fund Flows Report

You might also be interested in...

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.