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

At the halfway point, glass half full

At the halfway point, glass half full

Investors spent the first few days of the third quarter trying to link the potential outcomes of snap elections in the UK and France, and shifts in the American political landscape with the potential outcomes for those countries’ asset markets. It was an exercise that left them in a more cautious frame of mind than they had been for much of the second quarter.

Investors choose to follow the data

Investors choose to follow the data

Although the US Federal Reserve only sees one interest rate cut in the second half of 2024, investors opted during the third week of June to focus on recent data showing labor markets easing and price growth moderating. US equity indexes tested fresh record highs and the yields on 10-year Treasuries fell to their lowest level since late March.

Better, More Actionable Insights

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