Market Overview

Flow Data Reveals Where Money Has Gone The Week Of Black Monday

Flow Data Reveals Where Money Has Gone The Week Of Black Monday

With "Black Monday" still fresh in investors' minds, Ioannis Angelakis, Bank of America's European Credit Derivatives Strategist, commented in a note that record outflows have been seen during the last week in the majority of asset classes.

Here are the analyst's findings:

High-Yield Credit

High-yield credit fund outflows quadrupled week-on-week; reaching the highest it has seen in 55 weeks. In addition, high-yield ETFs suffered their worst outflow in 10 weeks.

High-Grade Credit

High-grade credit funds suffered their largest flow in six weeks, but ETF flows "remained resilient" and actually posted another week of inflow. The analyst noted that "unsurprisingly," duration was hit the hardest, as long-term investment grade funds saw a 0.4 percent of AUM (assets under management) outflow, compared to a 0.2 percent outflow for mid-term funds and 0.1 percent outflow for short-term funds.

Related Link: Staying Passive With Small-Cap ETFs

European Equity Funds

European equity funds did not "manage to escape the spiral," as it saw the first outflow in 15 weeks and the largest since October 2014.

Government Bond Fund

Government bond funds flows suffered their first outflow in seven weeks.

Global Emerging Market Debt Fund

Global emerging market debt fund flows "took the biggest hit" with a $4.2 billion outflow, a level that hasn't been seen since the "tapering tantrum."

Commodity Funds

Commodity funds posted a positive inflow after cumulative outflows reached $1.5 billion over the past semester. In fact, last week's inflow was the largest since January of this year.

Bottom line, the analyst stated, "With outflows hitting investment grade and high-yield credit funds, equities and emerging market debt, all in all the cumulative flow – or better to say outflow – into risky assets reached the lowest since the tapering tantrum exceeding -$12 billion, the second worst ever."


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