EM and high yield funds see outflows – report

Added 23rd September 2016

Emerging market equities and high yield bond funds saw outflows over the last week, according to Bank of America Merrill Lynch Global Research, while emerging market debt and investment grade funds continued to see inflows.

EM and high yield funds see outflows – report

Bank of Japan and Fed "taper-tantrum" fears may have sparked redemptions in emerging market equity funds, which saw its first outflows in 12 weeks, and in high yield bond funds; but emerging market debt and investment grade bond funds continue to be popular, according to the report.

The BAML research also showed that tech funds saw the largest inflows in 10 months at $0.9bn as Nasdaq made all-time highs, and Japan equity funds recorded the largest two-week inflow in eight months.

By contrast, Europe saw 33 straight weeks of redemptions and no interest since the February 2016 market lows.

The BAML ‘bull and bear indicator’ was in neutral territory at 5.1 this week, which is expected to rise in coming weeks as investor bullishness begins to rise, according to the report. A "sell signal" would arrive as the B&B Indicator approaches 8.0, noted the bank.

In terms of weekly flows, bond funds saw inflows of $3.8bn, while money-market fund recorded inflows of $15.6bn and equity fund outflows were at $7.4bn.  





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