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FUND FLOWS: Political News Hasn’t Dampened Investor Attitudes

The third week of April was full of political noise, but investors don’t seem to be listening.

Investors had a lot to chew on during the third week of April. President Donald Trump and North Korean President Kim Jong-un exchanging military threats, Venezuelan and South African protestors taking to the streets, Turkish President Recep Erdogan claiming victory in a referendum greatly expanding the presidency’s powers, the U.K. government calling a snap election and French voters preparing to cast their first ballots. Those in the U.S. were also settling tax bills, digesting the first round of this quarter’s corporate earnings and wondering if a second effort by Republican lawmakers to repeal and replace the health care reforms enacted in 2009 will be any more successful than the first.

Against this backdrop flows to and from most EPFR Global-tracked Equity and Bond Fund groups were subdued. U.S. Equity Funds posted outflows for the fourth time in five weeks and France Equity Funds for the eighth time in the past nine weeks, redemptions from Healthcare Sector Funds hit their highest level since late January, Japan Equity Funds posted consecutive weekly outflows for the first time since mid-November and over $12 billion was redeemed from U.S. Money Market Funds.

Overall, the week ending April 19 saw EPFR Global-tracked Bond Funds post net inflows of $3.8 billion while $635 million flowed out of Equity Funds and $14.7 billion from all Money Market Funds. Flows into Dividend Equity Funds were positive for the third straight week.

At the single country and asset class levels, flows into U.K. Equity and Brazil Funds hit 63 and 110-week highs, respectively, while China Equity Funds recorded their largest inflow in more than 10 months. Commitments to Bank Loan Funds fell to their lowest level since their current inflow streak began in November, Municipal Bond Funds took in fresh money for the fifth week running and Total Return Bond Funds extended their longest run of inflows since the second half of 2015.

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

TAGS: Mutual Funds
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