The high yield bond sell-off has proved short-lived. After two months of strong net outflows, fortunes for the asset class have reversed once again. For other fixed income asset classes, fund flows remained negative.
Asia-based fund selectors overwhelmingly hold a strong preference for European equities, according to a survey at FSA’s investment forums in Hong Kong and Singapore.
Outflows from emerging market equity funds slowed down considerably in September, according to Morningstar fund flows data. Moreover, the International Institute of Finance (IIF) estimates net flows will be positive in October. These would be the first net inflows into emerging markets since November last year.
August saw the greatest monthly outflows from emerging markets of all times. Asia, the origin of last month’s global market correction, was particularly hard hit.
European investors again added to their US equity allocation in July after a 6-month pause. Net inflows amounted to €2.7bn, the largest since February 2014.
While Danish investors remain bullish about the prospects for European equities, they are also in risk-on mode when it comes to bonds.
The spike in net inflows coincides with renewed appetite among fund selectors for the asset class.The share of fund buyers telling us they will increase allocation to high yield bonds in the next 12 months almost doubled from 12% in December to 23% in late March. There seem to be several reasons for the uptick in interest.…
No asset class or geography particularly stands out in fixed income, but Asia is “the least bad place to be,” said Garry Hawker, a partner with Mercer in Singapore.
Morningstars December fund flows exposed an appetite gap between investment grade bonds and higher yielding, riskier bonds.
According to the latest data gathered by EIE, Pan-European net sentiment (buyers minus sellers) is converging in the direction of zero for all bonds.
Despite rising market volatility, Catalan fund selectors remain bullish on emerging markets.
Belgian fund selectors have increased their exposure to Asian equities, but they are now dragging their feet.
