Gold and money market funds see inflows while high yield bond and emerging markets equity lose cash
As markets digested the latest multilateral effort to keep Greece 's fiscal woes from doing wider damage to the global recovery, investors sold perceived riskier asset classes during the second week of May.
Outflows from High Yield Bond Funds hit a five year high while Emerging Market Equity Funds suffered their second straight week of net outflows. Global Bond Funds saw their 54-week inflow streak come to an end while flows into US Equity Funds hit a 19-week high and nudging year to date flows into positive territory. Commodity Sector Funds set their second consecutive inflow record, with a gold ETFs again driving investor interest, and bringing the three-week inflow total for commodity funds to nearly $6 billion.
Overall, EPFR Global-tracked Bond Funds in the week ending May 12 posted their first net outflows since March, 2009, with investors removing $1.03 billion, while all Equity Funds tracked posted inflows of $9.89 billion.
Among the other winners were Money Market Funds, which attracted a year-to-date high of
$23.5 billion. It was the first weekly inflow into these low yielding and ultra-safe funds since the
first week of 2010, which have seen $388.5 billion of outflows year to date. US Bond Funds
took in fresh money whose inflow streak now stands at 61 consecutive weeks. Europe Equity Funds also saw record-setting inflows on the back of the over $6 billion committed to Germany ETFs.
Daily fund flows tracked by EPFR Global showed some improvement as the week progressed
and investors warmed to the $950 billion plan developed by the European Union and IMF to
prevent Greece's debt woes from creating another credit crunch and bolstering the prospects of the other indebted European countries to withstand a rapidly deteriorating sovereign debt crisis.
Fears that Greece 's fiscal problem could raise borrowing costs around the world and plunge Europe back into recession prompted a crash re-rating of the outlook for emerging markets in early May. Emerging Market Equity Funds combined sustained outflows of $2.1 billion during the week. Of the four major EM equity fund groups, the diversified Global Emerging Market Equity (GEM) Equity Funds were again the only ones to see any fresh money. Outflows from Latin America Equity Funds climbed to an 85-week high, EMEA Equity Funds surrendered $350 million and Asia ex-Japan Equity Funds had their worst week in well over a year.