The second week of December saw EPFR-tracked U.S. Money Market Funds post inflows for the fourth time in the past five weeks and flows into U.S. Equity Funds hit a six-month high as year-end profit taking, window dressing, Fed watching, and risk reduction held sway. High Yield Bond Funds experienced net redemptions for the seventh week running and Emerging Markets Bond Funds for only the fourth time year-to-date ahead of the U.S. Federal Reserve’s third rate hike this year while outflows from Alternative Funds climbed to levels last seen in the fourth quarter of 2016.
Reports that Italians will be going to the polls in early March hit Europe Equity Funds, with redemptions hitting their highest level in over a year, and Global Equity Funds—which on average allocate nearly 40 percent of their portfolios to Developed Europe—posted their first outflow in exactly a year.
Overall, EPFR Global-tracked Equity Funds collectively absorbed $8.6 billion during the week ending Dec. 13, despite another rough week for Dividend Equity Funds, which have now seen over $38 billion flow out since the beginning of the year. Bond Funds took in $1.2 billion and Money Market Funds over $22 billion.
At the single country and asset class fund levels, redemptions from Norway Bond and France Equity Funds hit 54- and 62-week highs while, Emerging Markets Country Fund groups, Peru and India Equity Funds experienced their heaviest redemptions since the second quarter and midway through the fourth quarter of 2016, respectively. Outflows from Convertible Bond Funds climbed to a 21-week high, investors pulled money out of Bank Loan Funds for the sixth time in the past seven weeks and Inflation Protected Bond Funds took in fresh money for the eighth week in a row.