US Fund Flows Slow in March as Investors React to the Iran War

Long-term US fund flows slowed significantly in March, bringing in under $48 billion. This was the lowest monthly intake since April 2025’s net outflow as investors recoiled to the impacts of the war in Iran.

While taxable-bond funds drove most of the month’s inflows again, it was a lackluster month for the category group, with investors derisking within their fixed-income allocations. While marginal, equity categories across the board gathered inflows.

The charts below illustrate which direction the money is flowing for a variety of fund types.

What’s inside:

• Flow totals for the largest fund families
• Morningstar category groups with the weakest and strongest fund flows
• Long-term trends in investor sentiment.

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Source: Morningstar Direct Asset Flows. Data as of March 31, 2026. 

It was a historic month for ultrashort-bond funds, which notched their largest monthly inflow on record with over $24 billion. This represented over 85% of taxable-bond net inflows, which stood at under $29 billion for the month, a notably weak showing for the rest of the category group. 

With the Iran war and the subsequent closing of the Strait of Hormuz, a systematically important trade route for global oil, inflation risks have reemerged as a primary focus for investors, leading to decreased allocations to long-term bonds and a rotation toward ultrashort bonds that offer very limited duration.

Source: Morningstar Direct Asset Flows. Data as of March 31, 2026. OGR stands for organic growth rate. 

Investors fled credit-risky bond allocations in March as the price of oil skyrocketed from around $70 per barrel to over $100 per barrel. Oil prices’ impact on both corporate fundamentals and the health of global economies cannot be overstated, and investors reduced exposure to more vulnerable areas of the fixed-income universe, such as the high-yield bond and emerging-markets bond categories. 

High-yield bond funds led all categories with over $9 billion in outflows, while investors pulled nearly $4 billion from emerging-markets bond funds, their largest outflow since March 2020.

Source: Morningstar Direct Asset Flows. Data as of March 31, 2026. 

Over $11 billion exited commodities funds in March, a record monthly figure. Over 80% of commodities funds belong to the commodities-focused category, which is dominated by gold funds such as SPDR Gold Shares and iShares Gold Trust that have consistently gathered significant assets over the past 12 months. 

These two funds alone drove the entire category group’s outflows; investors fled these investments as the price of gold fell for most of March and the US dollar strengthened from decade lows in late January.

Source: Morningstar Direct Asset Flows. Data as of March 31, 2026.

International-equity funds notched their 11th straight monthly inflow in March. That came despite a nearly 11% market selloff driven by the Iran war, which began at the end of February. Emerging-market stocks fell almost 13%. International funds’ roughly $10 billion March inflow fell well short of the previous two months, which both topped $30 billion. 

Foreign large-blend funds were the big winners, collecting more than $12 billion, while India equity, diversified emerging markets, and China region categories led outflows, dropping about $2 billion each.

Source: Morningstar Direct. Data as of March 31, 2026. 

Asset flows data in Morningstar Direct enables you to stay current with market trends. It offers a comprehensive, timely picture of the total net assets and estimated net flows across multiple geographical markets as well as organic growth rates for specific markets. 

With trusted, comprehensive flows data, you can:

• Monitor broad investor trends
• Perform competitive analysis
• Develop new products
• Market managed investment products