Quants Corner

In the week ending 20/02/2019, bond funds saw a total inflow of 4.5 billion US$ vs equity funds which saw an outflow of 12.7 billion US$.

As global markets experienced a solid start to 2019, concerns on global growth – triggered by US-China relations, Brexit – is leading a divergence in interest between different assets classes and geographies. Year to date Emerging Markets Equity funds saw an inflow close to 20 billion US$ vs Developed Markets Equities, which saw an outflow more 50 billion US$. Bond funds saw an inflow around 50 billion US$ vs Equity funds, which saw an outflow close to 30 billion US$. Emerging Market and High Yield bond funds in total had an inflow of 25 billion US$ whereas the combined interest to short term corporate & government bond funds was around zero.

Inflows to Emerging markets hit a pause in the week ending 20/02/2019, due to increased uncertainty around the developments on the trade negotiations between US and China. Emerging market equities saw an outflow of 470 million US$ and EM bonds had an outflow of 40 million US$. Retail fund outflows were balanced by the inflows coming from institutional investors in EM bonds. On the contrary, retail flows were positive for EM Equities. Hard currency EM bonds saw an inflow around 730 million US$ vs Local currency EM bonds which saw an outflow 760 million US$.

Developed market equity funds saw an outflow of 12.2 billion US$ in total. Slowing growth outlook in Germany and increased uncertainty around Brexit continues to put pressure on European assets. Europe equity funds have seen an outflow of 3.8 billion US$. US Equity funds also saw an outflow of 4.3 billion US$. Developed market bond funds continued to have inflows around 4.6 billion US$. European bond funds saw an inflow of 1.4 billion US$ backed by the expectations from the European Central Bank.

For more insight subscribe here: https://bit.ly/2PlsLcl