[SINGAPORE] Fixed income funds topped net inflows in 2025 among Asian investors prioritising stability and yield, based on data from funds network Calastone released on Tuesday (Jan 20).
Net inflows for fixed income funds hit US$28.2 billion, ahead of equity and multi-asset funds. This was more than half of the US$43.4 billion net inflows by Asian investors across all asset classes recorded in 2025.
Justin Christopher, head of Asia at Calastone, said: “Fixed income remained the anchor allocation as investors sought more predictable returns in an uncertain environment.”
Fixed income demand rose sharply through May to August 2025, with monthly net inflows peaking at US$4.8 billion in June and July. This suggests allocations increased as global conditions stabilised and yields remained attractive, said Calastone.
“Even when sentiment softened at times, demand for bond strategies quickly reasserted itself, highlighting the depth of conviction behind defensive positioning and yield-led portfolio construction,” added Christopher.
Fixed income only had net outflows in December of US$2.4 billion, which is consistent with year-end portfolio rebalancing and liquidity management, as well as cautious rate and currency positioning as investors assessed the outlook for 2026.
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Equity fund flows were more volatile compared to fixed income, with investors retreating in Q2 2025 after US President Donald Trump’s “Liberation Day” tariff announcement. The asset class recorded net outflows of US$1.5 billion in the second quarter of 2025, with April and June having net outflows of US$700 million each.
This was a reversal of equity funds net inflows of US$2.3 billion in Q1 2025. Equity funds recorded net outflows till September, when it returned to net inflows till the end of 2025.
Equity funds in the fourth quarter of 2025 had net inflows of US$1.1 billion, reversing the net outflow trend in the second and third quarters of 2025.
Multi-asset funds showed resilience through 2025, attracting net inflows of US$8.2 billion in 2025. The asset class had net outflows in April and May following the tariff announcement, as investors simplified portfolios and favoured security during the height of tariff uncertainty.
As volatility eased and market conditions steadied, multi-asset funds had net inflows from June to the end of the year.
“What we saw through 2025 was not a retreat from investing, but a recalibration of risk. Investors remained active – they simply concentrated flows into areas offering resilience and predictability,” said Christopher.
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