It seems too much (or not enough) is happening in specific countries and regions for investors to commit their money to them, but all-in-all they feel good about markets. Synchronized global growth has proved to the year’s most durable macroeconomic investment theme.
Going into November, EPFR-tracked Global Equity Funds maintained their record of posting inflows every week so far as year-to-date commitments to the biggest diversified Equity Fund group moved north of the $140 billion mark. Global Bond Funds, meanwhile, have taken in fresh money 43 of the 44 weeks YTD while Global Emerging Markets (GEM) Equity and Bond Funds have both posted inflows all but two weeks so far this year.
With open geopolitical questions hanging over Asia and Europe, and economic policymaking in the U.S. still in a state of flux, investors remain cautious about taking on direct country and even regional exposure.
Among Regional Equity Fund groups, only Latin America and Europe Regional Equity Funds have enjoyed sustained support during the second half of 2017. At the country level the reform stories in France, India, Brazil, Korea and Argentina continue to attract interest but most Country Fund groups have struggled to attract consistent inflows.
Overall, the week ending Nov. 1 saw EPFR-tracked Bond Funds absorb another $6.9 billion while Equity Funds took in $4.9 billion. Investors pulled $15.7 billion out of Money Market Funds, with Europe MM Funds recording their biggest weekly outflow since late January. Japan Money Market Funds, however, continue to defy the predictions of their imminent demise that followed the Bank of Japan's adoption of negative interest rates in early 2016: those tracked by EPFR have now posted inflows for seven straight weeks.
At the single country and asset class fund levels, flows into both Spain and Japan Equity Funds rebounded while Italy Bond Funds extended their current redemption streak to 29 straight weeks. On the asset class side, High Yield Bond Funds saw their longest run of inflows since the start of the calendar year come to an end, Municipal Bond Funds recorded their biggest outflow since early July and flows into Total Return Bond Funds hit levels last seen in the second quarter of 2015.