EPFR Global’s fund flow data for the week to 4 January revealed bond funds as a whole took in $3.45bn, with US bond funds accounting for the biggest share of new money, while high yield bond funds took in over $1bn in their fifth consecutive week of inflows.
This yield-hungry defensiveness was in sharp contrast to the first week of 2011, when investors pulled more than $14bn out of money market funds and poured nearly $11bn into developed equity, emerging market bond and equity funds and high yield bond funds.
In total, all EPFR Global-tracked equity funds posted net outflows of $1.64bn in the week to 4 January 2012.
EPFR Global said there was a slight thaw in sentiment towards funds with a focus on Europe but similarly to last year, ETFs absorbed some of the money redeemed from actively managed funds.
Emerging markets
In emerging markets, GEM equity funds were the only sub-sector to post inflows, while Latin America, Asia ex-Japan and EMEA equity funds all saw modest outflows.
The pace of redemptions from these regions has slowed somewhat, however, as the fears of a Chinese hard landing and concerns over inflation in Brazil have abated slightly.
US equity funds benefited from better-than-expected macro-economic data at the tail end of last year and the momentum has continued into 2012.
But EPFR Global said the fourth quarter earnings season and revised corporate forecasts could reverse this trend.
Elsewhere Europe bond funds posted their 17th consecutive week of redemptions, while Germany bond funds experienced their second-largest weekly outflows since the start of 2010.
In continuation of its role as shelter from the eurozone storm, UK bond funds took in fresh money for the eighth week running.
