This past week was a historic one for fund flows — investors pulled a historic amount out of equity funds while at the same time putting a historic amount into bond funds, and over 95% of the flows were in and out of ETFs.
Citi analysts Markus Rosgen and Yue Hin Pong relay the details in a note to clients:
U.S. funds had record-high inflow into bonds and outflow from equities — In the week ended 2/5/2014, there was a $US14.8 billion inflow into bond funds and a $28.3 billion outflow from equity funds, representing record highs in both cases. The inflow into bonds was driven by U.S. bond funds which saw $US13 billion of inflow. On the flip side, U.S. equity funds were hit by a $US24 billion outflow. More than 95% of these flows were attributed to ETFs.
$6.4 billion of outflow from EM funds — This was the 15th week of outflows from EM equity funds and was the largest outflow since August-2010. The major outflow was from GEM funds, at $US4.8 billion, while Asia funds had $US966 million of outflow. EMEA funds and LatAm funds had respective outflows of $US361 million and $US199 million. China funds ended a 6-week run of inflows with $US132 million of outflow this week.
$3.6 billion net selling of Asia equities by foreigners — In the week ended 2/5/2014, foreign net selling in Asia widened as Taiwan and Korea saw over $1 billion of net selling. Thailand was also sold down by $US516 million. In Japan, during the week of 1/31/2014, there was a massive $US7.0 billion net selling by foreigners.
The chart below illustrates the geographic breakdown of equity flows. Japan and Europe equity funds managed to garner inflows this week, but everywhere else, pared back.