Investors had plenty of reasons to take shelter in early September. Another hurricane bears down on Florida. A debt-ceiling brawl is forecasted for Washington, D.C. North Korean foreign policy continuing to operate in its own micro-climate and the outlook for further monetary easing in the Eurozone looking chillier. Money Market Funds were by far the most popular vehicle during the first week of the month, attracting nearly four times the amount absorbed by Bond Funds, and Gold Funds took in over $1 billion for the first time since the third week of March.
As investors tested their convictions in the face of looming policy debates, elections and China's Communist Party Congress in mid-October, a number of lengthy inflow and outflow streaks came to an end. Total Return Bond Funds posted outflows for the first time since late January and Europe Bond Funds saw their seven week run of inflows snapped while Asia Pacific Bond and EMEA Equity Funds took in fresh money for the first time since late May and mid-March respectively.
Overall, the week ending Sept. 6 saw EPFR-tracked Equity Funds absorb $3.7 billion, Bond Funds $6.5 billion and Money Market Funds over $25 billion. Since the beginning of the current quarter, U.S. Money Market Funds have taken in over $105 billion and flows into both Europe and Global MM Funds have also rebounded.
At the asset class and country fund levels, flows into High Yield Bond Funds hit a seven-week high, Bank Loan Bond Funds extended their longest outflow streak since the second quarter of 2016, and Municipal Bond Funds posted inflows for the ninth straight week. Russia and Philippine Equity Funds chalked up their biggest inflows in 19 and 24 weeks respectively, Korea Equity Funds absorbed fresh money for the seventh consecutive week and redemptions from Switzerland Bond Funds climbed to a 15-week high.
Cameron Brandt is Director of Research for EPFR Global, an Informa Financial Intelligence company.