US Fund Flows: Bond Funds Lead with $48.8 Billion Inflows in June, Taxable-Bond Funds Dominate Year-to-Date

US investors added $50 billion to open-end and ETF funds in June, despite US stock fund outflows. Taxable-bond funds gained $48.8 billion, led by intermediate core bond funds, while international-equity funds saw significant inflows of $15 billion. US equity funds suffered outflows for the second month, with the large-growth segment bleeding nearly $13 billion.

US investors added $50 billion to open-end mutual funds and exchange-traded funds (ETFs) in June, according to a new report from Morningstar [1]. This figure includes inflows into various types of funds, such as taxable bond funds and international equity funds, despite significant outflows from US equity funds.

Active ETFs, which have seen a modest slowdown in growth, still attracted $29.4 billion in June, reaching $200 billion in inflows for the first half of the year. The 8.8% organic growth rate in the second quarter of 2025 was the lowest since the third quarter of 2023, but Drew Carter, an analyst at Morningstar, attributed this to the large total asset base of the ETF market and expects no durable decline in flows to these vehicles [1].

Meanwhile, US equity funds lost nearly $36 billion in June, marking their worst monthly outflow in more than three years. This trend was driven by a decline in large-growth segment funds, which bled nearly $13 billion. Bond funds, particularly taxable bond funds, gained $48.8 billion in June, with intermediate core bond funds marking their largest monthly inflow since June 2021. International equity funds also saw significant inflows, totaling $15 billion in June [1].

Investors' interest in digital assets remained strong, with digital assets accounting for 60% of assets in the alternatives space in June. The iShares Bitcoin Trust ETF (IBIT) dominated digital asset flows, accounting for 86% of total inflows for digital asset funds in the first half of the year [1].

In other financial news, stocks in Europe and Asia rose, with US stock futures little changed despite recent tariff headlines. Taiwan Semiconductor's revenue rose 39% in the June quarter, buoying expectations for continued AI spending. Italian candy maker Ferrero is close to acquiring cereal producer WK Kellogg for about $3 billion, with Kellogg shares soaring 49%. Meta Platforms has made high compensation offers to new members of its "superintelligence" team, including a more than $200 million package for a former Apple engineer [2].

Investors are also pouring money into an exchange-traded fund run by BlackRock that invests in the shortest-maturity US government debt. The iShares 0-3 Month Treasury Bond ETF (SGOV) now manages more than $50 billion in assets, surpassing the iShares 20+ Year Treasury Bond ETF (TLT). Despite drawing tens of billions in inflows, TLT has lost roughly 40% in value over the past five years, earning its reputation as the "widow maker" of the ETF world [2].

References:
[1] https://www.etf.com/sections/news/IBIT-us-funds-gather-50b-new-assets
[2] https://www.bloomberg.com/news/newsletters/2025-07-10/etf-investors-can-t-get-enough-cash-these-days