President Trump’s declaration of sweeping tariffs in April led to a sharp sell-off across global equities, and confidence among Asian investors waned during the month.
Net inflows across all asset classes declined more than 97% from the January-March monthly average of $5.56bn to $0.14bn, according to the latest fund flow data from Calastone, a global funds network.
Equity funds, which had seen a strong revival earlier in the year, were hit hardest – swinging from steady inflows in Q1 to net redemptions of $0.68bn in April and $0.14bn May, as risk appetite declined.
Yet, net fund flows across all asset classes for the first five months of 2025 were strong, reaching $20.63bn, which was more than the $18.06bn recorded over the same period in 2024.
Indeed, equity funds reversed 2024’s outflows with $1.49 bn in net inflows in Q1, reflecting rising risk appetite. Robust momentum was seen in January ($6.65bn of inflows), February ($5.97bn), and March ($4.07bn), until sharp outflows in April and May were triggered by renewed trade tensions.
Justin Christopher, head of Asia at Calastone, commented: “The turbulence in April was a direct response to the sudden escalation in US trade tensions. Faced with unpredictable policy signals and heightened market volatility, it was only rational for investors to pause and reassess.”
“Yet the swift rebound in May across all asset classes highlights the resilience of Asia’s fund market and the agility of investors to adapt to rapidly shifting conditions.”
Nevertheless, fixed income funds led the market, attracting $13.29bn in net inflows between January and May, as investors favoured yield and portfolio stability.
Meanwhile, mixed asset funds were strong performers in the first quarter of 2025, attracting net inflows of $2.03bn – more than triple the $0.61bn recorded during the same period in 2024.
“The surge reflected continued demand for balanced strategies offering both growth potential and capital preservation,” according to Calastone, whose report is based on real-time fund subscription and redemption data across its network of Asia-based fund distributors.
