Global Navigator: Chasing earnings and keeping powder dry

With four out of five US companies reporting third quarter earnings that beat expectations, US equity markets climbed to fresh record highs during the fourth week of October. Mutual fund investors climbed aboard the earnings bandwagon, steering $28 billion into EPFR-tracked Equity Funds.

While focusing on the positive, however, those investors also shored up their defenses against inflation and the new taxes that may or may not emerge from the spending bills being pushed by US President Joseph Biden’s administration. Inflation Protected Bond Funds posted their second-largest weekly inflow so far this year, Bank Loan Funds took in fresh money for the 42nd time in the 43 weeks year-to-date and Cryptocurrency Funds chalked up their second record inflow since the beginning of the month.

Staying close to cash proved popular, with Money Market Funds recording their biggest collective inflow since the fourth week of 2Q20. Overall, flows into those liquidity funds during the week ending Oct. 27 totaled $79.7 billion. Equity Funds absorbed $28 billion, Bond Funds $8.6 billion, Balanced Funds $2.4 billion and Alternative Funds $1.8 billion.

Graph depicting the 'Cumulative flows, as percentage of Assets under management, for major money market fund groups, from 2016 to date'.

Graph depicting 'Change, in basis points for GEM equity fund allocations to major markets, 2021 to date'.

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Flows into EPFR-tracked Emerging Markets Equity Funds during the third week of January climbed to their highest level since mid-1Q21 as investors positioned themselves for China’s much anticipated economic rebound and, the anti-inflation rhetoric of the Federal Reserve and European Central Bank (ECB) notwithstanding, an early end to the current interest rate cycles in the US and Europe. Investors also steered $2.5 billion – a 101-week high – into Emerging Markets Bond Funds.

Global Navigator: Emerging markets funds | Mid-January

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Flows into EPFR-tracked Emerging Markets Equity Funds during the third week of January climbed to their highest level since mid-1Q21 as investors positioned themselves for China’s much anticipated economic rebound and, the anti-inflation rhetoric of the Federal Reserve and European Central Bank (ECB) notwithstanding, an early end to the current interest rate cycles in the US and Europe. Investors also steered $2.5 billion – a 101-week high – into Emerging Markets Bond Funds.

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