* Weekly flows: Bond flows (+$4.3bn) exceed Equity flows (-$2.0bn) for third straight week…ironically coinciding with performance of global equities relative to global investment grade bonds at 6-year highs.
* Back in vogue: EM debt funds have now seen 10 straight weeks of inflows as investor appetite for yield stays strong. $2.2bn inflow this week is the largest since Jan’13 (Chart 1)…this follows a massive $76bn of redemptions (23% of AUM) in the 10 months post May’13 taper tantrum.
* Out-of-favor: Floating-rate debt funds record 8 straight weeks of redemptions after an incredible 94 straight weeks of inflows. $1.2bn outflow this week is the largest since Aug’11 (Chart 2). Retail investors have dramatically reduced their expectations of higher rates.
>>> Asset Class Flows
* Equities: $2.0bn outflows (note divergence between $8bn outflows from long only funds and $6bn inflows to ETF’s)
* Bonds: $4.3bn inflows (13 straight weeks) (Table 1)
* Precious metals: $0.7bn outflows (largest weekly outflows since Jan’14)
* MMF: $7.3bn outflows
>>> Equity flows
* EM: $0.3bn outflows (first outflows in 4 weeks)
* Europe: $1.3bn inflows (inflows resume after rare outflows last week)
* US: $1.2bn inflows ($4bn into ETF’s vs $3bn out of LO funds)
* Japan: modest $0.4bn outflows (Table 2)
* By sector, strong $0.7bn inflows to both financials and real estate funds
>>> Fixed Income flows
* Largest weekly outflows ($1.2bn) from floating-rate debt since Aug’11 (8 straight weeks of outflows)
* $2.2bn inflows to EM debt funds (biggest since Jan’13) (Chart 3)
* $2.4bn inflows to IG bond funds (24 straight weeks)
* $0.6bn inflows to HY bond funds (17 straight weeks)
* 7 straight weeks of inflows to both MBS and Munis