They were still selling US equities over the last week. And they were still buying European shares.
That was one notable takeaway from the latest weekly flows update, which suggested the “US exceptionalism” theme continues to unravel in the face of rampant policy ambiguity and quasi-existential questions about America’s commitment to the norms and institutions which underpinned the post-War international economic and security architecture.
US-focused equity ETFs and mutual funds shed a net $9 billion in the week to April 30, according to EPFR. That was the second-largest weekly outflow of 2025.
Meanwhile, Europe-focused funds took in $3.4 billion for a second straight week. As the figure shows, European stock funds have seen inflows for 11 of the past 12 weeks.
I realize this doesn’t make for the most exciting reading, particularly if you don’t follow this data on a weekly basis, but you’re encouraged to note that Europe-focused equity funds were bleeding out on the pavement prior to February 2025, where that means it was just outflow after outflow after outflow, week after painful week.
US shares, by contrast, saw enormous, tsunami-sized inflows as American tech companies established pole position in the AI race and “Magnificent 7” market cap swelled to the size of several major economies.
So, this recent sea change — i.e., the US-to-RoW rotation — is quite remarkable, especially in the context of what’s supposed to be an American “golden age.”
Of course, this is still in its infancy. As BofA’s Michael Hartnett was keen to point out in his latest, the longer-term picture shows $1.3 trillion of inflows to US stocks since the pandemic (figure on the left, below).
As the figure on the right, above, shows, Europe-focused funds have seen a quarter-trillion of outflows over the same five-year stretch, and that’s after the recent inflection.
For every $100 inflow to US stocks since the election, a mere $5 has come out over the past three weeks, Hartnett wrote, adding that for every $100 outflow from European shares since the start of the war in February of 2022, just $14 has returned over the past three months.
Are any of my more enlightened co-subscribers here willing to explain what the professionals mean by ‘inflows’ and ‘outflows’ in this context? Given every equity purchase is matched by a sale there is no net flow in or out of equities at the transaction level. Are they referring to aggregate changes in market capitalization perhaps or metrics that relate to the creation of open end funds (which would also presumably still be neutral on flow once the underlying shares had been purchased).
For me you are correct but saying what you just said in an interview cost me a nice job.
Not a technician but as I understand, “money flow” is positive if the security is transacted when price is rising, negative if transacted when price is falling, and you can measure rising/falling tick by tick or on the day. Idea being that positive implies buyers more motivated than sellers, negative sellers more motivated than buyers. Or something like that – pretty loose concept I think.
Thanks both 🙂
Since this piece refers to funds and ETFs, aum?
The terms “inflow” and “outflow” only make sense in the context of equity funds (e.g. ETFs and mutual funds) and not in the case of individual stocks. If all investors just bought stocks directly, flows plotted above would be just zeros and we would need to look at money flows into stock exchanges to estimate flows of money into/out of equities in Europe and the USA.
In funds, when a new investor buys in and the fund can’t match the buyer with a seller, the fund will go fetch stocks and hold them on behalf of the buyer. This transaction counts as an inflow. The inverse is an outflow.
The inflow calculation is independent of the assets under management and the movement of the price of the fund. Here you can find the daily flows for SPY: https://www.etf.com/SPY
As a less than enlightened co-subscriber, I venture to answer – the flows (or out of) are into etfs and funds who then deploy the cash into purchases according to their mandates. So you don’t see a buyer/seller type exchange of stocks/bonds as in the open market for retail investors. Instead the cash goes to purchases/sales of assets and the law of supply and demand affects the price of those assets driving the price up or down.