If it was Trump's intention to finally spook the market into selling, he achieved his goal because according to the latest EPFR data quoted by Bank of America, the week ended June 27 saw a near record $29.7BN in equity outflows, offset by a modest $0.7BN in bond and $0.1BN in gold inflows.
The weekly outflow in global equities, comprising of $21.2BN in ETF outflows, and $8.5BN in mutual fund redemptions, was the biggest in 20 weeks going back to the February VIXplosion, and the 2nd largest weekly outflow from equities ever.
Contrary to previous weeks, in which the US managed to decouple from global fund flows, this week U.S. equities led the redemptions with $24.2BN outflows after 7 straight weeks of inflows; Europe was a distant second $3.9BN in outflows, the 16th in a row; and EM equities saw continued withdrawals, totaling $3.1BN, with redemptions observed in 7 of the past 8 weeks. This was the 3rd largest outflow from US equities ever.
Meanwhile the rout in Emerging Markets continued, with the biggest weekly outflow from the sector in years.
Commenting on the latest spike in outflows, BofA CIO Michael Hartnett said EM equity & debt outflows are accelerating as follows: +$68bn Jan-Apr, -$8bn May, -$18bn Jun, although he does not that redemptions still pale in comparison to 2008 & 2015, largely thanks to the record inflows in EMs prior to the latest rout .
Aside from EMs, two sub-sectors deserve focus: HY and tech:
- HY bond outflows remain big and on course for record $90bn outflows in 2018.
- Tech inflows continue ($19bn YTD vs. $9bn outflows all other sector funds).
And some more details, first by style:
- Huge outflows US growth ($6.2bn),
- US large cap ($17.2bn),
- US small cap ($3.2n),
- US value ($6.8bn)
Then by sector:
- inflows tech ($0.8bn), consumer ($0.1bn), utilities ($6mn);
- outflows real estate ($0.2bn), energy ($0.3bn), materials ($0.3bn), healthcare ($0.4bn), financials ($1.1bn)Looking
Some details on the latest weekly fixed income flows from BofA:
- Big IG bond fund inflows ($2.9bn)
- HY bond outflows 8th consecutive week ($2.0bn)
- 10th straight week of EM debt outflows ($3.2bn)
- 8th straight week of muni fund inflows ($0.4bn)
- Modest Govt/Tsy inflows ($0.9bn)
- Modest TIPS inflows ($0.4bn)
- Bank loan fund inflows 18 consecutive weeks ($0.3bn)
Finally, BofA notes that its high net worth clients are rushing into liquid, cash-equivalent safety, with T-bill holdings to 10-year high.
Source: BofA "The Flow Show"