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FUND FLOWS: Perception of The Fed Leaked Into Interest Rate-Sensitive Sector Funds

Another rate hike doesn’t look likely, which led to some winners and losers

The perception that the U.S. Federal Reserve is not likely to hike interest rates again this year–in part because of the latest employment data and the downward trend of some leading indicators–influenced flows for some interest-rate sensitive Sector Fund groups tracked by EPFR in early September. Consumer Goods Sector Funds posted their largest inflow since early June and flows into Real Estate Equity Funds climbed to a five-week high while Financial Sector Funds experienced net redemptions for the third time in the past four weeks.

North Korea's bellicose rhetoric and actions, meanwhile, gave Gold Funds a significant boost with inflows the biggest in 24 weeks. Another sub-group dedicated to precious metals, Silver Funds, saw flows climb to levels last seen in mid-February.

Technology Sector Funds also recorded inflows, the 30th time in the 36 weeks year-to-date that they've taken in fresh money. Funds with U.S. and Global mandates again recorded the biggest inflows in cash terms. But, when flows are viewed in percentage of AUM terms, investor focus has clearly shifted to Emerging Asia.


Retail investors have favored Technology Sector Funds so far this year, committing over $2.7 billion, with Financial Sector Funds their second most favored group. Real Estate and Healthcare Sector Funds have experienced the heaviest retail redemptions.


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

TAGS: Mutual Funds
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