The first week of September saw EPFR-tracked Bond Funds extend an inflow streak stretching back to mid-March. Investors did pull money out of Europe Bond Funds ahead of the European Central Bank's meeting, but the assumption the U.S. Federal Reserve will not hike rates again this year helped U.S. Bond Funds attract another $4.43 billion as year-to-date inflows for this group pushed north of the $265 billion mark. Emerging Markets and Global Bond Funds attracted fresh money for the 34th and 35th time respectively year-to-date and Asia Pacific Bond Funds enjoyed a rare week of inflows.
At the asset class level Total Return Bond Funds saw their inflow streak come to an end, with two Europe-domiciled funds seeing over $600 million redeemed apiece, U.S. High Yield Bond Funds recorded their biggest inflow since mid-July and flows into Mortgage Backed Bond Funds hit their highest level since the fourth week of January.
Among Europe Country Bond Fund groups those dedicated to Germany fared best, with flows hitting their second highest weekly total this year, while redemptions from Switzerland Bond Funds climbing to their highest level in over three months. Investors continue to rotate from funds with investment grade corporate mandates to those with a sovereign debt focus: Europe IG Corporate Bond Funds collectively recorded their biggest outflow since early April while Europe Sovereign Bond Funds posted their fifth straight inflow.
Emerging Markets Bond Funds with sovereign mandates also outgained their corporate counterparts, taking in nearly three times the amount committed to EM Corporate Funds . Latin America was the preferred region for investors seeking corporate exposure, Emerging Asia for investors focused on sovereign debt. At the country level the previous week's strong flows to China Bond Funds were reversed.
Among U.S. Bond Fund groups, Municipal Bond Funds continue to attract fresh money and flows to Long Term U.S. Government Bond Funds hit their highest level since the first quarter of 2016 on the back of large inflows to three ETFs.
Cameron Brandt is Director of Research for EPFR Global, an Informa Financial Intelligence company.