Key Takeaway
Net inflows stayed solid among global bond (US$3.0bn) and equity (US$19bn)
funds. In money terms, equity funds once again saw stronger net inflows, in
money terms, compared to bond funds. Global commodity (-US$444mn) funds
saw net withdrawals for the second week and stayed trendless over the past few
weeks. Lastly, unwindings from money market (-US$12bn) funds extended to
the third week and look as establishing outflow trends.
Countries that are on a bullish stance in terms of asset allocation (among
equities) while enjoying four consecutive weeks of net inflows or longer
via mutual funds/ETFs and foreign investors (if available) are Hong Kong
(EWH US, benchmarking MSCI Hong Kong), Italy (EWI US, benchmarking
MSCI Italy; ETFMIB EU, benchmarking FTSE MIB), Japan (EWJ US and IJPN
LN, both benchmarking MSCI Japan), Mexico (EWW US, benchmarking MSCI
Mexico), New Zealand (ENZL US, benchmarking MSCI New Zealand), Norway
(OBXEDNB NO, benchmarking OBX), the Philippines (EPHE US, benchmarking
MSCI Philippines), Russia (RSX US, benchmarking Market Vectors Russia Total
Return) and UK (ISF LN, benchmarking FTSE 100 and EWU US, benchmarking
MSCI UK). The ETFs that enable investors to obtain equity exposure are quoted
in brackets.
In the US, bond funds continue to attract net inflows. The latest amount stood at US$1.7bn.
US government bond funds continued facing withdrawals. Recent ten weekly withdrawals
totaled US$5.4bn and marked the longest selling streak since 2007. Equity funds recorded
a sharp injection (US$12bn, the heaviest in 16 months) following two weeks of light
withdrawal. Lastly in the money market, recent unwindings extended to the third week
although the amount has reduced sharply to just US$53mn.
In Europe, bond funds saw net outflows for the past two weeks while the latest withdrawal
stood at US$1.0bn, the largest in six weeks. In contrast, equity funds continued attracting
net inflows, at a net US$1.2bn (a seven-week high) lately and for the fourth week in a row.
By market, France and UK saw larger inflows across the region. Notably, net inflows in the
UK extended to the fourth week and such is the best run over the past two years.
Within Asia Pacific, mutual fund/ETF investors and foreign investors extended their winning
streak to 20 and 11 weeks, respectively. Mutual fund/ETF investors have pumped a net US
$2.1bn into equity markets and China funds continued to top the region, witnessing the
heaviest net inflow for the week. For the second week, all the markets within the region
experienced net injections via mutual fund/ETF investors. Foreign investors net bought US
$2.4bn in equities. Japan saw the largest buying at a net US$2.2bn. Korea once again
witnessed foreign selling (-US$1.2bn, the largest in 15-month high) while they have been
sellers for three weeks. Korea stayed the only market that recorded net foreign selling within
the region year-to-date.