MMF reform behind huge asset swings

EPFR - fund flow & allocations data

Inflation muscling in on post-pandemic narrative

By Cameron Brandt 18 Jan 2021

For several months now, investors have been buying into forecasts of a global economic rebound unleashed by widespread vaccination against the COVID-19 virus. Fears that inflation will also slip the leash when the rebound occurs took a backseat to the global reflation story. During the second week of January, this undercurrent of inflationary angst bubbled to the surface as markets factored in rising commodity and transportation costs, cash stockpiles in savings and money market accounts, the fiscal agenda of the incoming US administration and signals from the US Federal Reserve that the switch to a tightening bias could occur much sooner than previously expected. The week ending Jan. 13 saw EPFR-tracked Inflation Protected Bond Funds extend their current inflow streak to eight weeks and $8.7 billion, Bank Loan Funds record their biggest inflow since mid-2Q18, flows into Commodities Sector Funds hit a record high and Energy Sector Funds record their 12th consecutive inflow and largest in over 11 months.

EPFR - fund flow & allocations data

Quants Corner - Animal spirits arise in retail investors

By Vikram Srimurthy 13 Jan 2021

After years of pulling money out of equity funds, retail investors are starting to step back in. EPFR-tracked Equity Funds ended 2020 with eight straight weeks of retail inflows, their longest such run since 2Q06. In this, retail investors are several years behind the institutional money and, as a result, have missed out on strong market returns four of the past five years. Global Equity Funds have been the biggest beneficiaries of this latest surge in retail interest. During 2019 this group recorded retail inflows 19 of the year’s 52 weeks. In 2020 they posted retail inflows 44 times. The last time there was such a concentration of retail money going into a single fund category was 2016, and before that 2015. In both cases, the rush into Australia and China Equity Funds ended badly for retail investors. Are Global Funds headed for the same comeuppance? Have they missed the bus? Prior to 2020, the chance of a positive retail flow into Equity Funds ranged from one week in every nine during 2014 to one in 25 during 2016. Last year this group attracted retail money two out of every five weeks...

Zephyr Portfolio Analytics

Ryan Nauman's Weekly Recap: COVID-19 Market Edition 01.11.21

By Ryan Nauman 12 Jan 2021

The week ahead will be highlighted by the release of the December consumer price index. Inflation is in the crosshairs of investors as Inflation expectations have been increasing, particularly this week as investors are anticipating additional fiscal stimulus following the Georgia election. Additionally, large financial corporations kick off the fourth quarter earnings cycle during the week. Corporate earnings are expected to increase during the quarter. However, coronavirus cases surged during the quarter which may place downward pressure on earnings...