The bullish fund flows are back. This is how Bank of America summarizes the latest EPFR capital flow sentiment: "Loving Wall Street: $15bn equity inflows + $5bn HY/IG inflows + 6 straight weeks of commodity inflows = investors are "risk-on"
Specifically, a surge in equity:
- Equities: $14.6bn inflows (largest in 6 weeks) (note $12.3bn via ETFs – SPY, XLV, QQQ)
- Bonds: $2.9bn inflows (3 straight weeks)
- Commodities: 6 straight weeks of inflows ($0.3bn) (longest inflow streak in 8 months)
Virtually all the equity inflows were via ETFs:
Here Comes the Fed: Treasury funds record largest outflows in 17 weeks ($1.8bn) + bank loans record first inflows in 13 weeks = investors discounting Dec Fed hike
The Need for Yield: largest HY bond inflows in 8 months ($3.9bn); even retail-popular high-yielding MLP see inflows (investors redeemed $1.2bn from Jun-Sep’15); but once again, EM debt saw outflows
- $3.9bn inflows to HY bond funds (3 straight weeks) (largest in 8 months in absolute terms)
- $1.8bn outflows from Govt/tsy funds (3 straight weeks) (largest in 17 weeks); Largest inflows to IG bond funds in 12 weeks ($1.2bn)
- $0.4bn outflows from EM debt funds (outflows in 13 out of 14
Like with equities, the bulk of the inflows in IG were via ETFs:
Europe & EM in Vogue: largest EM inflows in 16 weeks ($1.3bn); EU inflows in 22 out of past 24 weeks (another $3.2bn inflows this week, huge YTD inflow $106bn)
- Europe booming: largest inflows in 8 weeks ($3.2bn) (inflows in 22 out of past 24 weeks)
- Japan snaps back: $0.8bn inflows (2 straight weeks)
- EM: $1.3bn inflows (largest in 16 weeks)
- US: $7.8bn inflows (largest in 6 weeks & all via ETFs)
Biggest winners YTD: APAC equities (read Japan), Healthcare (despite sell-off), IG bonds, European equities (Chart 1)
Biggest losers YTD: industrials, LatAm equities, utilities, EM debt ($-denominated), EEMEA equities (Charts 4-5)





