A question of growth going into 2H21

For much of the year-to-date the question of just how much inflation recovering economies will generate, and just how transitory that inflation will be, has occupied investors. As the second quarter wound down, however, another question has intruded: what if it is the economic growth that is transitory?

With China’s economy feeling the pinch from some modest policy tweaks and the US Federal Reserve signaling that interest rates could start to rise at least a year earlier than previously expected, Commodities Sector Funds ended June by posting consecutive weekly outflows for the first time in over eight months while Industrial Sector Funds extended their longest redemption streak since 1Q20 and investors pulled money out of China Equity Funds for the fourth time in the past six weeks.

The specter of rising prices and visions of a greener future continued to influence flows going into the second quarter. Equity Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates extended an inflow streak that started in mid-August of last year, Bank Loan Funds posted their 26th consecutive inflow and Inflation Protected Bond Funds absorbed fresh money for the 32nd week running.

The week ending June 30 also saw EPFR-tracked Dividend Equity Funds record their eighth straight inflow, their longest such run in over six years, as investors positioned themselves for increased US and European bank dividends after those banks successfully navigated the latest round of stress tests. The latest run of positive flows to US Dividend Funds comes at a time when the average dividend yield for companies in the S&P 500 index has dropped to 1.3%.


Graph depicting the 'Cumulative flows, in US million dollars, to dividend fund groups by geofocus, from 2012 to date'.


Graph depicting 'Emerging markets country ranking, from Q1 to Q5'.

Did you find this useful? Get our EPFR Insights delivered to your inbox.

Related Posts

Green shoots for Europe stock funds

Green shoots for Europe stock funds

With the Bank of England and the European Central Bank widely expected to follow the example of their Swedish and Swiss counterparts, and start cutting interest rates at their June policy meetings, investors waded a little deeper into the European equity pool during the second week of May.

Living through interesting times

Living through interesting times

Weaker US job creation numbers and the first interest rate cut by Sweden’s central bank since 2016 gave investor risk appetite a modest boost during the first week of May. Flows to all EPFR-tracked Equity Funds climbed to a six-week high, High Yield Bond Funds recorded their biggest inflow since early November and Europe Equity Funds posted consecutive weekly inflows for the first time in over 14 months.

Sell in May and go away until 2025?

Sell in May and go away until 2025?

The final week of April ended with US markets closing the books on their worst month since September, the price of Bitcoin down some 17% from its mid-March high, Russia on the offensive in Ukraine and US interest rate cuts nowhere in sight. Against this backdrop, flows to most EPFR-tracked fund groups remained subdued for the second week running.

Better, More Actionable Insights

Let us show you how EPFR can create value for your specific strategy