{"id":61221,"date":"2017-03-06T01:25:00","date_gmt":"2017-03-06T00:25:00","guid":{"rendered":"http:\/\/beta.next-finance.net\/news\/reaching-for-yield-continues-in-fixed-income-world\/"},"modified":"2019-12-31T01:47:10","modified_gmt":"2019-12-31T00:47:10","slug":"reaching-for-yield-continues-in-fixed-income-world","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/news\/reaching-for-yield-continues-in-fixed-income-world\/","title":{"rendered":"Reaching for yield continues in fixed income world"},"content":{"rendered":"

It’s all about rates<\/h2>\n

Lower front-end rates have been pivotal to support flows into credit to the detriment of flows into equities. Investors continue to favour short-duration high-grade paper to insulate against steepening of curves, while outflows continue from high duration pockets.<\/p>\n

Over the past week\u2026<\/h2>\n

High grade funds<\/strong> continued on a positive trend for the sixth week in a row; and recorded the highest inflow in three weeks. <\/p>\n

High yield funds<\/strong> inflows remained strong for another week, now counting 13 weeks of positive flows. Looking into the domicile breakdown, as charts 13 & 14 show, even though European-focussed funds recorded inflows, the majority of the inflow is concentrated in US and globally-focused funds.<\/p>\n

Government bond funds<\/strong> flows went back to negative territory after a brief week of inflows. Money market funds weekly flows were negative for the third week in a row. Overall, fixed income funds flows remained strong and positive for the tenth consecutive week; with more than $30bn over that period.<\/p>\n

European equity funds<\/strong> flows on the other hand moved back to negative territory after five weeks of inflows. The outflow from the asset class was the biggest in thirteen weeks.<\/p>\n

Chart 1: Reaching for yield continues in FI world (cumulative weekly flows, $mn)<\/strong>
\n\"reaching_for_yield_continues_in_fi_world.jpg\"<\/a>
\nSource: EPFR Global, 4wk cumulative flows for IG funds<\/em><\/p>\n

Global EM debt fund<\/strong> flows continued on the positive trend for a fifth week, however we note a weakening of that trend recently. Commodities funds<\/strong> flow remained positive for a seventh week.<\/p>\n

On the duration front, strong inflows continued in short-term IG funds<\/strong> for the 11th week in a row. Mid-term funds<\/strong>‘ flows turned slightly positive after three weeks of sizable outflows, while flows into long-term funds<\/strong> remained negative for a second week.