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Risk-on returns for first time in ten weeks

Equities and bond funds both recorded inflows for first time in two months globally, signalling a general turn back from the risk-off thinking which has held sway recently.

Equities saw $2.6bn inflows, the first positive reading in four weeks. Notably, this figure was derived from $4.3bn of ETF inflows versus $1.7bn of mutual fund outflows.

Bonds had $3.8bn of inflows over the week, according to the data. This number was derived from $2.6bn of inflows to high yield bond funds, $0.4bn of inflows to emerging market debt funds and $0.5bn of inflows to investment grade bond funds.

According to BAML these flows have in large part been driven by a ‘collapse in Fed hike expectations’.

Geographically, Japanese equities funds fared badly with $1.6bn outflows while emerging markets saw a modest reversal in fortunes as $0.7bn flowed in for the first time in 14 weeks.

European equities performed strongly with $3.1bn of inflows, while the United States was marginally into positive territory, with $0.7bn coming in.

Elsewhere in the asset allocation spectrum precious metals saw the largest inflows in seven weeks at $0.3bn. 

Part of the Bonhill Group.