It may come as a surprise to some that as the S&P500 has remained in a tight trading range over the past month, investors continued to withdraw substantial amounts of cash. According to the latest EPFR weekly data, global equities saw another $3.9bn outflows (comprised of $6.2bn in mutual fund outflows vs $2.3bn ETF inflows), which brings the number of weekly outflows to 5 in the past 6 weeks. Of note here is that while Europe has now suffered a record record 37 straight weeks of outflows, the US has been comparably pressured, with outflows in 6 of the past 7 weeks.
On a global basis, a whoppping $146 billion has now been pulled across equity funds, with $79 billion in ETF inflows offsetting $225 billion in mutual fund outflows.
As money was leaving equities it entered bonds, which saw not only $2.7bn inflows in the latest week, but inflows in 15 of past 16 weeks. Precious metals, the "forgotten category" benefited from $0.5bn in inflows in the last week, making that 4 straight weeks of money being allocated to PMs.
Summary by Asset Class:
- Equities: $3.9bn outflows (outflows in 5 of past 6 weeks), $6.2bn mutual fund outflows vs $2.3bn ETF inflows
- Bonds: $2.7bn inflows (inflows in 15 of past 16 weeks)
- Precious metals: $0.5bn inflows (4 straight weeks)
The breakdown by region:
- EM: $1.0bn inflows (inflows in 15 of past 16 weeks)
- Europe: $1.6bn outflows (record 37 straight weeks of outflows)
- US: $5.1bn outflows (outflows in 6 of past 7 weeks)
- Japan: tiny $22mn inflows (inflows in 6 of past 7 weeks)
- By sector: 4 straight weeks of financials inflows ($0.4bn); 5 straight weeks of materials inflows ($0.3bn); largest REITs outflows in 13 months ($1.0bn); 3 straight weeks of outflows from utilities & telcos; chunky healthcare outflows ($0.7bn.
Some details on fixed income flows:
Fixed Income Flows
- 12 straight weeks of inflows to bank loan funds ($0.6bn)
- 19 straight weeks of TIPS inflows ($0.4bn)
- 16 straight weeks of inflows to EM debt funds ($0.6bn)
- Small $0.1bn inflows to HY bond funds (4 straight weeks)
- $1.5bn inflows to IG bond funds (inflows in 32 of past 33 weeks)
- 2 straight weeks of outflows from munis ($0.2bn) (following 55 straight weeks of inflows)
- 15 straight weeks of outflows from Govt/Tsy funds ($0.5bn)
* * *
So we go back to our favorite question: with everyone pulling their cash, who is buying? Traditionally the normative answer would be buybacks, however we mostly entered buyback week two weeks ago, so the question certainly remains unanswered.