In the wake of Donald Trump’s surprise victory in the 2016 presidential election, EPFR Global-tracked U.S. Equity Funds saw inflows surge in tandem with the U.S. stock market. Between the second week of November and the third week of March, investors committed over $90 billion to this fund group. Since late in the first quarter of 2017, however, flows have reversed as a string of missteps by the president, and his administration has sapped investor faith in Trump’s reflationary promises. The third week of May saw investors redeem money from U.S. Equity Funds for the seventh time in the past nine weeks as the political fallout from Trump’s abrupt firing of FBI Director James Comey continues to build.
While the appetite for U.S. Equity Funds has faded, investors retained their enthusiasm for Emerging Markets Equity and Bond Funds, committing fresh money to Europe Equity Funds for the eighth week running and steering another $3.8 billion to Global Equity Funds.
Overall, EPFR Global-tracked Bond Funds posted a collective net inflow of $9.7 billion during the week ending May 17 versus outflows of $1.6 billion for Equity Funds, and over $19 billion for Money Market Funds.
At the single country- and asset-class fund level, flows into France and Norway Bond Funds hit 40- and 72-week highs respectively, and Korea Equity Funds recorded their biggest inflow since early in the first quarter of 2016. Inflation Protected Bond Funds posted outflows for the fifth time in the past seven weeks, High Yield Bond Funds took in fresh money for the third time in the past four weeks and Total Return Bond Funds extended an inflow streak stretching back to the beginning of February.
Cameron Brandt is Director of Research for EPFR Global, an Informa Financial Intelligence company.