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The
main beneficiaries in the week to March 30 were a range fixed
income funds - investment-grade, emerging markets and
inflation-protected bonds - but that was outweighed by a
sizeable outflow from Treasury and government debt funds.
Last week typified the trend in fixed income during the quarter
- "a tale of two markets", according to BAML, in which
government and Treasury bond fund flows mostly diverged from
credit, EM and inflation-protected bond fund flows.
Investors pulled $1.6 billion from Treasury bond funds, the
sixth straight week of redemptions and $400 million more than
the total directed towards investment grade, EM, TIPs and
municipal bond funds combined, BAML said.
The first quarter was one of the most volatile starts to a year
for financial markets in living memory, a period of turbulence
that tightened global financial conditions and put a pause on
the U.S. interest rate-raising cycle.
It was also a quarter of two halves. The first six weeks saw
markets plunge, spreads widen and financial conditions tighten
dramatically. Since mid-February stocks and commodities have
rallied and spreads have narrowed again.
Overall, global bond funds rose 5.5 percent in the quarter, BAML
said, far outperforming stocks (+0.4 percent). The biggest
winner was gold, which rose 16.1 percent in the quarter.
The net inflow into gold funds in the last week was a tiny $32
million, but it still marked the 12th consecutive weekly inflow.
Equity funds lost $2.6 billion in the latest week, led by a $2.0
billion outflow from European funds. That was the eighth
consecutive outflow and marked the longest streak of redemptions
in almost three years, BAML said.
Money market funds posted an outflow of $13.6 billion in the
latest week, the fifth outflow in a row, BAML said.
In the first quarter, investors pulled $50.35 billion out of
global equity funds and $46.69 billion out of money market
funds. Fixed income and commodities funds attracted net inflows
of $27.69 billion and $15.53 billion, respectively, BAML said.
(Reporting by Jamie McGeever; editing by John Stonestreet)
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