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Index Performance

At the close of LSEG Lipper’s fund-flows week ending August 13, 2025, all U.S. broad-based indices traded positive: S&P 500 TR (+1.26%), Nasdaq (+0.81%), Russell 2000 (+3.07%), and DJIA (+0.9%).

Macro Viewpoint

July’s inflation data delivered an upside surprise and amplified concerns surrounding price pressures and complicating the Federal Reserve’s September rate decision. The producer price index (PPI) surged 0.9% month over month, while the headline price was up 3.7% year over year, well above median expectations. The gains were driven by a 0.9% rise in energy and a 1.4% increase in good prices, while the core PPI index, excluding goods, energy, and trade increased 0.6%. By contrast the consumer price index (CPI) painted a more tempered picture. Headline CPI increased 0.2% in July after a 0.3% increase in June. On a year-over-year basis, the index increased 2.7%, in line with expectations. With inflation dynamics sending mixed signals and growth momentum showing signs of fatigue, pressure is mounting for the Fed to deliver a rate cut at its highly anticipated September meeting.

Fund Flows by Asset Type

All major asset types posted positive net inflows this week. Money Market funds once again dominated the leaderboard, attracting $25.7 billion as investors maintained a preference for liquidity and capital preservation. Fixed Income followed with $10.7 billion, supported by ongoing demand for favorable yields, while Equity funds saw $10.2 billion in net flows. Although the equity value is positive, the net flows are still a mountain away from record highs. At the other end of the spectrum, Alternatives and Mixed Asset funds posted more modest totals, with inflows of $578 million and $36 million, respectively. While smaller in absolute terms, the gains in these segments suggest investors are selectively diversifying into non-traditional and multi-asset strategies.

Performance by Lipper U.S. Classifications

• Equity

Within the equity universe, performance tilted toward higher beta and cyclical exposures. Equity Leverage led the race with a robust positive 6.64%, capturing amplified gains amid a support market breadth. Small-Cap Value (+5.43%) and Small-Cap Core (+4.63%) also delivered favorable returns amid a shift in investors’ appetite for lower-cap securities. Basic Materials posted a strong (+5.59%) return, buoyed by industrial demand, while Health/Biotech advanced (+3.85%), supported by growth in select healthcare names. On the other hand, defensive and rate-sensitive sectors generated marginal returns. Real Estate scrapped up only (+0.53%) amid a higher interest environment, while India Region (+0.88%) and Mid-Cap Growth (+0.98%), faced regional and style-specific headwinds.

• Fixed Income

Within the fixed income universe, U.S. Municipal Bond Funds posted a modest gain of 0.17%, supported by steady demand for tax-exempt income. On the taxable side, performance skewed toward high-yield and non-traditional exposures. Alternative Bond funds delivered and outsized 5.69% return, topping the asset class, while EM Debt funds gained 0.99% on favorable currency dynamics. U.S. High Yield funds added 0.39%, benefiting from spread compression. At the lower end of the spectrum, U.S. Government & Treasury funds barely moved at 0.04%, with Short/Intermediate Government & Treasury funds and Short/Intermediate Investment Grade funds registering similarly muted returns of 0.13% and 0.14%, respectively.

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