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Flows into the riskier Bond Fund groups picked up during the seven days ending July 10 and over $40 billion piled up in Money Market Funds as investors looked ahead to the US Federal Reserve’s Open Markets Committee meeting at the end of the month. The FOMC is expected to confirm its shift to an easing bias with a 0.25% cut in short term interest rates, and a significant minority of investors think a 50-basis point cut is possible.
The latest flows into EPFR-tracked Bond Funds took their year-to-date total past the $310 billion mark. That total stands in stark contrast to the flows seen in the second half of last year, when Government Bond Funds were the only major group to record net inflows. Investors remain skeptical of the assets in Bank Loan Funds, and the determination of those in the fixed income space to avoid any exposure to equity is keeping Balanced and Convertible Bond Fund flows in the red.