Expectations for economic growth, US job creation and the transitory nature of inflation all took a knock during the second week of October as supply chain issues and rising energy prices continue to bite.
The first week of October saw US lawmakers sparring over the country’s debt ceiling, authorities in China scrambling to limit the wider damage property giant Evergrande’s debt crisis may cause, and central bankers from Canada to Poland wrestling with the tradeoff between economic growth and rising prices.
Going into the final days of July, the Equity and Bond Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates tracked by EPFR chalked up their 51st and 70th consecutive inflows respectively.
EU and UK regulators are planning to scrutinize the role and transparency of environmental, social and governance (ESG) ratings providers. It is a potential can of worms, but they must open it.
Funds offering exposure to the most widely followed measure of US equity market volatility, the Chicago Board Options Exchange’s CBOE Volatility Index (VIX), are seeing a surge in flows as investors pencil in a much bumpier ride in 2021 than they’ve experienced since the 2008-12 post-financial crisis period.
The prospect of a second major spike in Sino-US trade tensions cast a shadow over markets and some fund groups in mid-May. EPFR-tracked China Equity Funds posted their biggest weekly outflow since early 3Q15 as US President Donald Trump threatened China with new trade sanctions if it does not boost its imports from the US and allow independent investigation of the origins of the COVID-19 pandemic.
EPFR-tracked Bond Funds were swept up in the broad correction that hit most fund groups in late February, posting their first weekly outflow in over a year during the seven days ending March 4, as fears about the Wuhan coronavirus (Covid-19) continued to pummel asset classes ranging from oil to junk bonds.
A coronavirus epidemic centered in China put global equity markets on the defensive in late January and prompted Chinese officials to suspend trading on the Shanghai and Shenzhen stock exchanges. But the impact on flows to EPFR-tracked Equity Funds was mixed.
After a quarter when both the US Federal Reserve and European Central Bank reversed course on the normalization of their monetary policies, the focus during the first week of October shifted from central bankers to the Sino-Chinese trade war, the latest corporate earnings season, and impending elections in Spain, Canada, and Argentina.
Fund flows ended July with a whimper. Redemptions from EPFR-tracked Equity and Bond Funds hit their highest daily totals since June 28 and the final day of 2018 respectively as investors tried to make sense of the US Federal Reserve Open Markets Committee’s decision to cut interest rates by 25 basis points.