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Fixed Income and Money Market Funds Lead April Market Sell-Off

The announcement of widespread future tariffs on April 2nd sent shocks throughout financial markets, leading to the sharpest declines in equity markets since the onset of the COVID-19 pandemic. March had already proven a difficult month for investors, with the S&P 500 experiencing a 10% correction from its February highs after escalating tensions with the United States’ leading trade partners. The April 2nd announcement subsequently caused a $6.6 trillion loss in U.S. stock market value, the largest loss in history according to Dow Jones Market data.

Weekly flows provided by ISS MI MarketPulse provide further insight into the reactions of fund investors to the market upset. March’s downturns had already seen investors redeem extensively from equity strategies, with weekly outflows totaling $35.2 billion for the week ending March 19th. Figure 1 displays weekly net flows on an asset class level. Money market funds also experienced significant net redemptions in mid-March as investors sought liquidity while others prepared to shift assets back into long-term funds. Investors engaged in extensive opportunistic buying the following week, prompting equity inflows to rebound to $21.6 billion. Money market funds saw a similar rebound, gathering $23.9 billion over the following two weeks.

Figure 1: Bond and Money Market Funds Face Harshest Redemptions in April

Weekly flows in billions of U.S. dollars, February 26, 2025 – April 9, 2025

Source: ISS MI MarketPulse powered by Simfund
Note: excludes allocation funds and funds of funds
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Authored By

Alan Hess, ISS Market Intelligence

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