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EPFR: Hard-, local-currency EM bond funds see outflow of $1.51 billion in latest week
By Rebecca Melvin
New York, July 6 – Emerging markets bond funds in both hard and local currencies pulled $1.51 billion total out of funds for the week ended July 4, representing the 11th straight week of outflows for the asset class, according to fund flows and asset allocation data tracker EPFR Global.
The outflow was nearly evenly split, with $850 million going out of hard-currency funds and $835 million going out of local-currency funds.
“It was a pretty subdued week with a certain amount of risk aversion,” EPFR’s Cameron Brandt told Prospect News on Friday. By way of comparison there was an outflow from high-yield funds of $2.26 billion.
Meanwhile Europe and emerging markets equity funds also kicked off the third quarter with another weekly outflow. The string of outflows makes it the longest redemption streak since 2016, as higher energy prices, rising U.S. interest rates, fresh victories for populist politicians and the threat of a Sino-U.S. trade war continue to sap investor confidence.
Brandt noted that with the United States imposing $34 billion worth of tariffs on Chinese goods, the world gripped by soccer fever, the U.S. markets enjoying a short week ahead of the Independence Day holiday and the Fed's June minutes in the mix, mutual fund flows overall were predictably subdued.
Redemptions from all equity funds came in at 0.002% of assets under management, while flows into bond and money market funds represented 0.0035% and 0.015% of assets under management, respectively, according to EPFR.
The first week of July did see global equity funds snap their longest run of outflows in nearly two years and flows to Japan equity funds extend their latest rebound.
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