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. Headline inflation for the US in September exceeded 5% for the third month running while new job creation was less than half of the expected total while the IMF trimmed another 0.1% off its global growth forecast.

Investors responded by beefing up their exposure to inflation protected securities, pulling money out of the riskier fixed income fund groups and positioning themselves for short-term gains driven by the latest corporate earnings season. Both High Yield and Emerging Markets Bond Funds saw over $1.5 billion redeemed during a week when commitments to Inflation Protected Bond Funds hit an 11-week high.

Overall, the week ending Oct. 13 saw EPFR-tracked Bond Funds post a collective net inflow of just $77 million. Equity Funds took in $11.8 billion, with a third of that total going to funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates, and Balanced Funds absorbed $1.4 billion.

Graph depicting 'Net flows, in percentage of Assets under management terms, for major fund groups, from 2015 to date'.

 

Graph depicting 'Emerging markets country ranking'.

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

Related Posts

Interest rates and investor sentiment on hold

Interest rates and investor sentiment on hold

Investors hoping for the p-word got one during the third week of September. But it was ‘plateau’, rather than ‘pivot’, as the Bank of England and US Federal Reserve kept interest rates at their current levels but went out of their way to stress that they could remain at those levels for some time.

Another turn of the screw in Europe

Another turn of the screw in Europe

The question of when major central banks will declare victory in their battles against inflation or, in the case of China, misallocation of credit and shift their focus to economic growth continued to preoccupy investors during the second week of September. Based on flows to EPFR-tracked funds, the current answers are soon (the US), not soon enough (China) and not as soon as we thought a week ago (Europe).

Keeping the powder dry in early September

Keeping the powder dry in early September

The first week of September saw EPFR-tracked Money Market Funds absorb over $65 billion as investors waited to see which way interest rate winds are blowing in the US and Eurozone. Also giving them pause for thought are the health of China’s economy, the durability of the latest bump in oil prices and the resilience of key real estate markets.

Better, More Actionable Insights

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

First Name
Last Name
Email Address
Job Title
Company
Country
Contact Number
View our privacy policy.