According to the latest report from EPFR Global, investors last week liquidated positions and moved $49.8bn into money market funds that in the previous week themselves saw record-setting outflows; emerging market equity (losing $7bn), global equity and balanced funds all hit level not previously seen since 2008; real estate funds had their worst week in nearly four years while US equity fund outflows hit a 26 month-high.
Two-thirds of the entire week’s outflows were from high yield bond funds that sparked EPFR Global’s research director Cameron Brandt to observe: “Concern that weaker growth will undermine the ability of more borrowers to service their debts seems to be the main driver of this exodus.”
Overall, $26.1bn was moved out of equity funds, while a record high of $10.4bn was taken out of bond funds.
Commodity funds specialising in gold and other precious metals were the chief sector beneficiary, attracting $9bn since the start of July, in stark contrast to industrialised commodities that are still seeing huge outflows.
Emerging market local currency bond funds and Japan equity funds also attracted money though EPFR Global described them as “modest”; emerging market hard currency bond funds had their worst week this year.
Developed market equity funds experienced outflows not previously seen since early 2008 with the US and Europe leading the way. Emerging Europe regional equity funds saw more than $300m of redemptions, with Russia equity funds hit particularly hard with their largest outflow since January 2006.
BRIC equity funds posted their 17th consecutive week of outflows, with India equity funds seeing withdrawals of $2bn so far this year.
