IGI Logo

Global flows stabilise after 2 weeks despite macro concerns. India Dedicated flows continue. but pressure from GEM funds

• Despite the surge in US 10 Year bonds, concerns of rate hikes in US and the Iran- Israel war situation, Global flows have not shown any major dent yet.
• This week we saw small inflow of $5.2bn into Global equities after slower redemption of $24.7bn over the previous 2 weeks. Overall flow momentum has slowed down but when compared with the underlying events, markets doesn’t seem to be showing bigger panic in flows until now.
• US Tech flows have lost some momentum and will be crucial to watch for getting a view on the US markets. This week US Tech saw inflow of $2.4bn after outflows of $6.7bn over the past 2 weeks.
•  EM flows remain soft led by outflows from GEM funds for 3^rd week. China, Korea and Brazil are major regions with redemption pressure. Taiwan flows remain strong.
•   After 2 weeks of outflows totalling $1.8bn from Japan, flows recovered sharply with strongest inflow since Jan 2018 of $5.8bn (largely on back of strong inflows from domestic investors). Foreign flows into Japan have seen only one outflow in the past 4 months (in week ended 27^th Mar).
• Inflows into India dedicated funds continued for straight 58^th week but momentum slowed to $274mn this week from $450mn in previous week. All inflows continued to be led by Large cap funds. India dedicated Midcap funds see slower redemptions for 8^th week in a row totalling $170mn. Redemptions from GEM funds is creating pressure on overall India flows.
•  Total India flows were negative to the tune of $170mn (largest since 1^st Nov 23) on back of pressure from GEM funds, while dedicated inflows continue. 
•  Global High Yield & Corporate bond flows stabilised marginally this week after 2 weeks of strong outflows. Global risk appetite, as measured by Junk bonds, is not showing big panic until now. IG funds NAV line is negotiating a crucial support.

Above views are of the author and not of the website kindly read disclaimer