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Flow records fall in early March but investors still looking for entry points

The dominant theme for the week ending March 11 – flight to safety – was writ large in the fund flow data as the COVID-19 virus continued to spread and oil producers found themselves in a price war. EPFR-tracked Money Market Funds posted a new inflow record, flows into US and Japan Equity Funds hit five and eight-week highs respectively and commitments to Gold Funds hit their highest level since late 3Q19. Meanwhile Europe, Emerging Markets and Total Return Bond Funds experienced record-setting redemptions, as did all Bond Funds, while outflows from High Yield Bond Funds were the biggest since mid-3Q14 and second largest on record.

Fear, however, was not the only theme influencing flows. Yield hunger drove fresh money into Dividend Equity Funds, Brazil’s reform story pulled another $530 million into Brazil Equity Funds and funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates comfortably extended an inflow streak stretching back to late 4Q18.

“Investors are also gravitating towards markets with reputations for social cohesion and the capacity for decisive action,” observed EPFR Research Director Cameron Brandt. “This week we saw positive flows for Norway, South Korea, Singapore, Australia, France, UK, Japan, Netherlands, Hong Kong, Russia and Taiwan Equity Funds.”

Overall, the second week of March saw $25.8 billion flow out of all Bond Funds, $6.3 billion from Balanced Funds, $4.7 billion from Equity Funds and $1.3 billion from Alternative Funds while Money Market Funds took in over $135 billion.

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