As noted in Assogestioni’s latest quarterly report, the last quarter of the year was negative for the mutual fund market, due to outflows that were concentrated in November. According to Assogestioni’s monthly data, in December 2025, the overall net inflows of open-ended mutual funds were positive (+1.6bn), in line with the models’ expectations but higher (+0.7bn from nowcasting), indicating that the expected normalisation after November’s risk-off did occur, but with greater intensity.

Fund inflows were positive for both Italian funds (+0.5bn) and foreign funds (+1.1bn), consistent with demand that, when it returns to positive territory, is also directed to a significant extent towards cross-border offerings, favoured by the breadth of the range.

For individual asset classes, the models had predicted a moderately positive but highly cautious December, with bonds and money market funds as the driving force and risky segments experiencing outflows, while the data show a different rotation.

Bond funds (+2.1bn) confirmed the expected trend, but inflows were much stronger, consistent with an environment in which, despite rising long-term rates and therefore prices that were not always favourable during the month, carry remains attractive and the incentive to enter the market grows as long as coupons are attractive, also in light of greater policy clarity after the FOMC and more orderly sentiment.

The increased demand for bond products penalised money market funds, which were negative (-1bn), contrary to what was anticipated by the models. To the extent that the market is pricing in further cuts or low rates for a long time, money market funds may have lost some of their appeal compared to instruments that allow returns to be ‘fixed’ for longer.

Alternatively, the performance of this asset class could reflect the fact that cautious choices have favoured products outside the scope of funds (deposits and/or short-term direct instruments) or that cash requirements and rebalancing had an impact at the end of the year.

Not only were equity funds not as negative as expected, but they also marked a sharp recovery (+1.1bn), consistent with a tactical re-risking dynamic after the November correction. With more manageable volatility and support from leading sectors (Tech and Financials), some investors may have seen the month as a window of opportunity to re-enter the market rather than a continuation of risk-off.

Finally, multi-asset funds moved more in line with expectations: flexible funds remained negative in line with model expectations (-0.6bn), indicating that investors continue to prefer exposure to individual asset classes over products with both equity and bond investments, while balanced funds, despite performing better than expected (+17m), were almost flat, confirming that there was no significant change in demand.

Overall, 2025 ended with demand still cautious and flows concentrated in the first part of the year: inflows, which were positive in the first half, accelerated in the third quarter, bringing the cumulative total to high levels, before declining in the fourth quarter, indicating that the final phase of the year did not translate into a broad and stable return to risky assets.

The picture is consistent with demand that favoured fixed income, attracted by good returns, and maintained a more gradual approach to higher-risk components because long-term rates are still high and more sensitive credit conditions increase price uncertainty and make the advantage of taking risk less immediate.

This has resulted in a preference for lower-risk exposures—primarily bonds—rather than a decisive rebalancing toward riskier components. Compared to 2024, when inflows strengthened especially in the second half of the year, in 2025 net inflows were higher in the first half, giving way to a correction in the second half due to profit-taking on equities and persistent weakness in flexible products.

According to the Prometeia nowcast for January 2026, total net inflows into open-ended mutual funds are expected to be positive by approximately +2.3bn. This is consistent with the macro-financial dynamics observed during the month: after a start to the year characterised by new geopolitical shocks (with increased volatility and strong demand for hedging, also visible in the rise in gold prices), the markets nevertheless showed a steady risk appetite and overall positive equity performance, supported by a decline in the risk premium and an improvement in sentiment that was at times euphoric.

On the bond front, despite a slight rise in ten-year rates and a sell-off in Treasuries linked to fears of an escalation in trade disputes, Europe (and Italy in particular) benefited from more solid government prices and a further narrowing of the BTP-Bund spread, while credit risk improved, especially on US high yield.

In this context, overall positive inflows are plausible because they combine a partial return to risk after the correction at the end of 2025, continued robust demand for fixed income and controllable instruments in a context of lower inflation in the euro area and cautious central banks (the ECB essentially unchanged and the Fed on hold in January), and the persistence of a tactical component of liquidity management, which tends to move quickly when volatility and geopolitical and trade uncertainty increase.