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Rising yields, Greensill collapse hit Bond Fund flows
The week ending March 10 saw EPFR-tracked Bond Funds post their biggest outflow in nearly a year as concerns about US bond yields and the liquidation of funds linked to bankrupt supply chain finance company Greensill Capital chased over $15 billion from this fund group.
While the specter of another wave of US Treasuries hitting the market contributed to the growing angst about global borrowing costs, the $1.9 trillion worth of stimulus they will be issued to finance added fresh fuel to the global reflation narrative. That narrative has lit a fire under flows to EPFR-tracked Equity Funds, which took in over $20 billion for the fifth straight week and remained on track for a new quarterly inflow record as year-to-date flows moved within striking distance of the $240 billion mark.
That the flood of global debt issuance could undermine fiat currencies and generate uncomfortably high levels of inflation continues to worry a significant number of investors. Inflation Protected and Bank Loan Bond Funds extended their current inflow streaks, Commodities Sector Funds took in fresh money for the 19th time in the past 20 weeks and cash continues to flood into Cryptocurrency Funds.