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FUND FLOWS: Bond Fund Rebound Extends

Even emerging markets bond funds took in money for the third straight week.

The week ending Aug. 23 saw EPFR-tracked Bond Funds post inflows for the 23rd straight time as commitments to Emerging Markets Bond Funds rebounded to a three-week high, Global Bond Funds took in over $1 billion for the 10th time in 11 weeks and Europe Bond Funds absorbed fresh money for the sixth straight week. U.S. Bond Funds extended their current run of inflows, but the total was the lowest since the streak began in mid-March.

At the asset class level High Yield Bond Funds posted outflows in excess of $2 billion for the second straight week, redemptions from Bank Loan Funds hit a 78-week high. Mortgage Backed Bond Funds saw their six-week run of inflows come to an end and Municipal Bond Funds took in fresh money for the 27th time in the 34 weeks year-to-date.

Europe Bond Funds enjoyed their strongest retail support in 12 weeks, with flows shifting from funds with corporate mandates to those dedicated to sovereign bonds. At the country level U.K. Bond Funds again stood out, with flows into this fund group hitting a 21-week high.

Investors focused on the U.S. also showed less enthusiasm for corporate debt, with redemptions from U.S. High Yield Bond Funds exceeding $1.5 billion and Long Term U.S. Corporate Bond Funds posting outflows for the first time since mid-June. Flows into Long Term U.S. Government Bond Funds, meanwhile, climbed to an 11-week high.

Asia Pacific Bond Funds recorded another week of outflows, their 28th so far this year but, at the country level, Hong Kong Bond Funds extended an inflow streak stretching back to early March. Hong Kong’s bond market is now connected to mainland China’s via a “connect’ scheme similar to the ones linking the Chinese territory’s equity markets to those in Shanghai and Shenzhen.

China Bond Funds were among the Emerging Markets Bond Fund Country Fund groups to see inflows during a week when EM Corporate Bond Funds attracted twice as much money as their sovereign counterparts and flows to Emerging Markets Local Currency Bond Funds climbed to a seven-week high.

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

TAGS: Mutual Funds
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