Global mutual fund assets surged to a record $78.2trn in 2024, marking a 13.6% year-on-year increase, according to Calastone’s Global Fund Flows Report. The report, on Tuesday 11 February 2025, attributed this sharp rise to strong performances in both equity and bond markets, coupled with increased fund inflows. The total assets under management now stand at double the level recorded nine years ago, surpassing the previous peak reached at the end of 2021.
Calastone is a funds trading and data provider that said it had “over 4,500 clients in 56 countries and territories”.
Trading volumes
Investor activity in 2024 intensified significantly, with trading volumes across Calastone’s global network soaring by 34% to a record $1.32trn. This marked a substantial increase over the previous record set in 2021. The report noted that December’s data was not yet available at the time of writing but projected an additional $104bn in trading volume for the month. The sharp rise in activity followed two subdued years, as 2022’s bear market had led to a sharp decline in volumes, with only a partial recovery in 2023.
Equity fund trading volumes saw the highest increase, jumping 39%. Half of this rise was attributed to higher asset prices, while the other half resulted from increased trading activity. Fixed-income fund trading volumes climbed 33%, driven primarily by investor engagement, while mixed-asset fund trading rose by 23%, though net inflows for the category remained less positive.
Net fund flows
Net fund inflows rose sharply in 2024, with total net inflows across equities, fixed income and mixed assets reaching $61.0bn, up from $23.9bn in 2023. The report found that, over the past five years, net equity fund inflows have represented just 1.5% of total traded volumes.
Bond funds emerged as the strongest performers, attracting a net $52.0bn in inflows. The report stated that inflows to bond funds rose across Asia, Europe, the UK and Australia, with all territories recording their highest levels in six years. Since 2019, investors have allocated more capital to bond funds than to all other asset classes combined.
Equity funds
Despite strong equity market performance, global equity fund inflows remained relatively low at $3.5bn in 2024. However, this represented an improvement over 2022 and 2023. The report highlighted that record trading volumes and small net inflows suggested a lack of consensus among investors, as well as sector switching within equity funds.
Global and North American equity funds saw the highest net inflows, with $18bn and $9bn respectively. European equity funds recorded their first inflows in six years. However, both Asia-Pacific and UK-focused equity funds experienced substantial net outflows, driven mainly by local investors. UK-focused equities suffered the worst losses, with net outflows of $13.3bn in 2024.
Investors favoured passive equity funds over actively managed funds in 2024. The report showed that net inflows into equity index trackers totalled $17.5bn, while actively managed equity funds saw net outflows of $14bn. Despite this trend, actively managed global and North American equity funds performed better than their passive counterparts, attracting greater inflows.
In contrast, actively managed fixed-income funds continued to outperform index-tracking bond funds. The report found that 75% of fixed-income inflows in 2024 went to actively managed bond funds, a trend that has been consistent over the longer term. Asian and Australian investors were identified as the primary buyers of active bond funds.
ESG, property and mixed-asset funds
Environmental, social and governance (ESG) equity funds continued to experience net outflows in 2024, though at a slower pace compared to previous years. The report stated that $2.9bn was withdrawn from ESG equity funds, while non-ESG counterparts saw net inflows of $6.4bn.
Real estate funds continued their downward trajectory in 2024, recording $615m in net outflows. This marked the sixth consecutive year of investor withdrawals from property funds.
Mixed-asset funds saw net inflows decline to $5.6bn in 2024, the lowest level recorded in six years. However, the report noted that mixed-asset funds had maintained positive net flows for three consecutive years, outperforming equities in this regard.
Interest rate cuts
Edward Glyn, head of global markets at Calastone, stated in the report that 2024 represented a major turning point for global markets as central banks began cutting interest rates following a period of high inflation. He highlighted that Calastone’s position at the centre of global fund flows allowed it to observe real-time shifts in investor behaviour.
With global fund inflows rebounding and trading volumes at record highs, the report suggested that investor confidence had strengthened considerably. However, ongoing sectoral shifts and the divergence between passive and active fund preferences underscored continued market uncertainty.