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Bond Funds see biggest monthly outflow in October since 4Q15

Preliminary numbers indicate that October, which ended with another weekly outflow of over $8 billion, was the worst in flow terms for EPFR-tracked Bond Funds in over two and a half years. Concerns about global economic growth, the pace of monetary tightening in the US and political shifts in Europe saw Global Bond Funds post their 12th outflow in the past 13 weeks during late October while Europe Bond Funds extended their longest run of outflows since 4Q11 and US Bond Funds since 4Q15.

Flows to Equity Funds followed the same pattern as the preceding two weeks, with Japan, China and Korea Equity Funds recording above average inflows while funds with European, global and US mandates struggled to attract fresh money. Year-to-date redemptions from Europe Equity Funds pushed over the $60 billion mark and Global Equity Funds recorded their third straight outflow, the longest such run since 2Q13.

Overall, EPFR-tracked Bond Funds posted a collective net outflow of $8.1 billion during the week final week of October while $1.3 billion flowed out of Alternative Funds, $1.4 billion from Equity Funds – with Dividend Equity Funds reporting outflows for the 40th time year-to-date -- and $5.6 billion from Money Market Funds.

At the single country and asset class fund levels, commitments to Brazil Equity Funds hit a 32-week high and outflows from Brazil Bond Funds a 12-week high following Jair Bolsonaro’s victory in Brazil’s presidential election. Municipal and Inflation Protected Bond Funds again extended outflow streaks that are the longest since 4Q16 and 4Q14 respectively, Mortgage Backed Bond Funds posted their biggest weekly outflow since 2Q17 and investors pulled another $1.4 billion out of Total Return Bond Funds.

Net Weekly Flows 

 

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