You are here: Home » Reuters » News

Investors pull $7.4 billion from stocks funds, largest outflow in 12 weeks: BoFA-ML

As uncertainty over US and Japanese monetary policy unnerved stocks

Global investors pulled $7.4 billion from equity funds in the week to Wednesday, the largest outflow in around three months, as uncertainty over and Japanese monetary policy unnerved stocks, Bank of America Merrill Lynch (BofA-ML) said on Friday.

A spike higher in longer-dated bond yields had caused yield curves in the (US), Japan and Germany to steepen over the past two weeks, prompting the redemptions from European, and emerging markets stocks funds.

Although there was little expectation that the Federal Reserve would raise rates at its Sept 20-21 meeting, investors erred on the side of caution and parked $15.6 billion in money market funds in the run up to the Fed decision.

Investors were also wary ahead of the Bank of Japan's (BoJ) Sept 21 meeting at which it made an abrupt shift in policy, saying it would buy government bonds when necessary to keep 10-year yields at their current levels of around zero per cent.

The reassured markets that it would continue to buy riskier assets, but some analysts suggested it had overhauled its stimulus policy so it would be easier to exit in future.

"and Fed 'taper-tantrum' fears may have sparked redemptions in emerging market equity funds and in high yield bond funds," BofA-ML analysts wrote in a note.

A steeper yield curve strengthens the appeal of risk-free bonds such as Treasuries over lower quality assets in emerging markets.

Emerging market equities saw their first outflows in 12 weeks, albeit a small $100 million, whilst some $1.2 billion was redeemed from high yield bond funds.

equity funds lost $7.7 billion, their largest outflows in 12 weeks, whilst equity funds lost $1.8 billion in a record 33rd straight week of redemptions.

"Europe continues to be the 'vacant' trade (with) no interest since the February 2016 market lows," BofA-ML said. stocks have fallen 5.3 per cent so far this year.

Japanese equities bucked the trend, attracting $2.4 billion. The was up around 7.6 per cent in the third quarter, but is still down almost 12 per cent so far this year.

Overall, bond funds attracted some $3.8 billion, with emerging market debt funds pulling in $1.5 billion in their 12th straight week of inflows. grade bonds attracted some $2.8 billion.

image
Business Standard
177 22
Business Standard

Investors pull $7.4 billion from stocks funds, largest outflow in 12 weeks: BoFA-ML

As uncertainty over US and Japanese monetary policy unnerved stocks

Reuters  |  London 

Investors pull $7.4 billion from stocks funds, largest outflow in 12 weeks: BoFA-ML

Global investors pulled $7.4 billion from equity funds in the week to Wednesday, the largest outflow in around three months, as uncertainty over and Japanese monetary policy unnerved stocks, Bank of America Merrill Lynch (BofA-ML) said on Friday.

A spike higher in longer-dated bond yields had caused yield curves in the (US), Japan and Germany to steepen over the past two weeks, prompting the redemptions from European, and emerging markets stocks funds.

Although there was little expectation that the Federal Reserve would raise rates at its Sept 20-21 meeting, investors erred on the side of caution and parked $15.6 billion in money market funds in the run up to the Fed decision.

Investors were also wary ahead of the Bank of Japan's (BoJ) Sept 21 meeting at which it made an abrupt shift in policy, saying it would buy government bonds when necessary to keep 10-year yields at their current levels of around zero per cent.

The reassured markets that it would continue to buy riskier assets, but some analysts suggested it had overhauled its stimulus policy so it would be easier to exit in future.

"and Fed 'taper-tantrum' fears may have sparked redemptions in emerging market equity funds and in high yield bond funds," BofA-ML analysts wrote in a note.

A steeper yield curve strengthens the appeal of risk-free bonds such as Treasuries over lower quality assets in emerging markets.

Emerging market equities saw their first outflows in 12 weeks, albeit a small $100 million, whilst some $1.2 billion was redeemed from high yield bond funds.

equity funds lost $7.7 billion, their largest outflows in 12 weeks, whilst equity funds lost $1.8 billion in a record 33rd straight week of redemptions.

"Europe continues to be the 'vacant' trade (with) no interest since the February 2016 market lows," BofA-ML said. stocks have fallen 5.3 per cent so far this year.

Japanese equities bucked the trend, attracting $2.4 billion. The was up around 7.6 per cent in the third quarter, but is still down almost 12 per cent so far this year.

Overall, bond funds attracted some $3.8 billion, with emerging market debt funds pulling in $1.5 billion in their 12th straight week of inflows. grade bonds attracted some $2.8 billion.

RECOMMENDED FOR YOU

Investors pull $7.4 billion from stocks funds, largest outflow in 12 weeks: BoFA-ML

As uncertainty over US and Japanese monetary policy unnerved stocks

As uncertainty over US and Japanese monetary policy unnerved stocks
Global investors pulled $7.4 billion from equity funds in the week to Wednesday, the largest outflow in around three months, as uncertainty over and Japanese monetary policy unnerved stocks, Bank of America Merrill Lynch (BofA-ML) said on Friday.

A spike higher in longer-dated bond yields had caused yield curves in the (US), Japan and Germany to steepen over the past two weeks, prompting the redemptions from European, and emerging markets stocks funds.

Although there was little expectation that the Federal Reserve would raise rates at its Sept 20-21 meeting, investors erred on the side of caution and parked $15.6 billion in money market funds in the run up to the Fed decision.

Investors were also wary ahead of the Bank of Japan's (BoJ) Sept 21 meeting at which it made an abrupt shift in policy, saying it would buy government bonds when necessary to keep 10-year yields at their current levels of around zero per cent.

The reassured markets that it would continue to buy riskier assets, but some analysts suggested it had overhauled its stimulus policy so it would be easier to exit in future.

"and Fed 'taper-tantrum' fears may have sparked redemptions in emerging market equity funds and in high yield bond funds," BofA-ML analysts wrote in a note.

A steeper yield curve strengthens the appeal of risk-free bonds such as Treasuries over lower quality assets in emerging markets.

Emerging market equities saw their first outflows in 12 weeks, albeit a small $100 million, whilst some $1.2 billion was redeemed from high yield bond funds.

equity funds lost $7.7 billion, their largest outflows in 12 weeks, whilst equity funds lost $1.8 billion in a record 33rd straight week of redemptions.

"Europe continues to be the 'vacant' trade (with) no interest since the February 2016 market lows," BofA-ML said. stocks have fallen 5.3 per cent so far this year.

Japanese equities bucked the trend, attracting $2.4 billion. The was up around 7.6 per cent in the third quarter, but is still down almost 12 per cent so far this year.

Overall, bond funds attracted some $3.8 billion, with emerging market debt funds pulling in $1.5 billion in their 12th straight week of inflows. grade bonds attracted some $2.8 billion.
image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard