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FUND FLOWS: Odd Couple: Gold, Financials, Lead Sector Funds

Trump plans to spur growth while restricting trade gives asset managers plenty of questions, few answers.

With the fourth quarter corporate earnings season beginning to wind down and a holiday weekend in the middle of the reporting period, EPFR Global-tracked Sector Fund flows were predictably muted during the week ending Feb. 22. They also conformed largely to the previous week’s pattern, with Commodities and Financial Sector Funds recording the biggest inflows, and the more defensive Healthcare and Utilities Sector Funds the biggest outflows.

As was the case the week before dedicated Gold Funds absorbed the bulk of the money committed to Commodities Sector Funds; as U.S. President Donald Trump’s plans to spur growth while restricting free trade and the free movement of skilled workers generated plenty of questions and few answers. Agricultural Commodities Funds saw their longest inflow streak since 1Q13 came to an end and Industrial Sector Funds recorded outflows for only the third time since Trump’s election.

The belief that uncertainty about Trump’s policies will stay in the Fed’s hand in March did give Real Estate Sector Funds a boost, with inflows hitting a six-week high.

While investors have favored Commodities, Financials and Technology Sector Funds so far this year—in that order—the allocations decisions made by managers of diversified funds mean that commodity plays only rank fifth when it comes to net purchases by all EPFR Global-tracked Equity Funds.

Cameron Brandt is Director of Research for EPFR Global, an Informa Financial Intelligence company.

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