Global debt flows - ING Think · 2019. 9. 27. · 2) In inflation space, inflows to USD funds continue, in part a reverse of a prior exodus, while European inflation funds have yet

Global debt flows September 2019

1

Global debt flows Added exposure to duration and spread

A notable underpinning in the past number of months has been an increased allocation to USD-denominated bonds. This is thematic in developed markets, has acted as a USD FX support, and is acting to keep USD rates & spread under wraps. It is also thematic in emerging markets where hard currency remains favoured over local currency (from a flows perspective). That apart, we identify a marketplace that has re-set some duration longs, while risk assets spanning investment grade corporates to high yield remain supported. The risk is that something gives at some point, given the likely macro & political stresses ahead.

Graph of the week: Notable inflows to long end government and belly corporates

Source: EPFR Global, ING estimates

Six things learnt from latest flows data 1) We note decent flows into long end government funds, and the polar opposite

on the front end. So the market has been getting long duration. We also note the increased allocation to US bonds over the past year.

2) In inflation space, inflows to USD funds continue, in part a reverse of a prior exodus, while European inflation funds have yet to see a material reversal of prior outflows.

3) In corporate bonds, a strong inflow to belly funds has been a feature of recent months. Inflows to corporate high yield remains firm, albeit not in the past week. Professionals have been the bigger buyers, in excess of pure retail.

4) Emerging markets local currency has been outperforming hard currency for a change this month. This gels with some resumed inflows into local currency, even though the inflows to hard currency remain more impressive.

5) Professional players have been the dominant buyers of emerging markets in the past few month, and in fact retail have been set sellers of local currency bonds in the past month.

6) Changes in global allocations are mostly reflective of relative stresses, with reductions in allocations to Turkey, S Africa and Argentina impactful. Less of these direct stresses in Asia see a steadier allocation there.

-5.00-4.00-3.00-2.00-1.000.001.002.003.004.005.00

Government Corporate Multi-Product

Short end Belly Long end Total

% AUM PAST QUARTER

Note: The weekly data in this report reference the week ended Wednesday 25th September 2019

Rates and Credit

Economic & Financial Analysis

27 September 2019

Global Debt & Rates

www.ing.com/THINK

Padhraic Garvey Head of Global Debt and Rates Strategy and Head of Research Americas ING Financial Markets LLC / ING Capital Markets LLC New York +1 646 424 7837 [email protected] View all our research on Bloomberg at ING


2

Contents

Global Manager (average) Allocations by Region 3

Emerging Markets 4 Emerging Markets – Summary themes ........................................................................................... 5 Emerging Markets Net Fund Flows ................................................................................................... 6 Global EM Manager Asset Allocations .............................................................................................. 7 Regional EM Manager Asset Allocation ........................................................................................... 8 Selected EMEA and Latam Country Flows ...................................................................................... 9 Selected Asia and ME/Africa Country Flows ................................................................................ 10

High Yield 11 High Yield – Summary themes ....................................................................................................... 12

Developed Markets 14 Developed Markets – Summary themes ...................................................................................... 15 Global DM Manager Asset Allocations .......................................................................................... 17 Developed Markets Country Flows ................................................................................................ 18

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3

Global Manager (average) Allocations by Region Fig 1 Global allocations one month ago (%) Fig 2 EM allocations one month ago (%)

Source: EPFR Global, ING estimates Source: EPFR Global, ING estimates

Fig 3 EM detailed allocations one month ago (%) Fig 4 EMEA allocations one month ago (%)


Fig 5 Asia EM allocations one month ago (%) Fig 6 Latam allocations one month ago (%)


Fig 7 Developed allocations one month ago (%) Fig 8 Eurozone allocations one month ago (%)


North America, 48.6

Asia Ex-Japan, 2.6Developed Asia, 6.5

Latin America, 3.9

Developed Europe, 29.1

Emerging Europe, 2.4

Africa, 0.6Middle East, 0.6Other, 0.0 Cash, 3.0

Africa, 9.3

Asia Ex-Japan, 22.3

Other, 2.3


Middle East, 10.3

Latin America, 32.9

Brazil, 7.5

Mexico, 7.0

Indonesia, 7.6

Turkey, 3.7

Russia, 4.9

Colombia, 4.3South Africa, 4.2Poland, 2.5

Argentina, 2.7Malaysia, 2.2

Hungary, 1.8Peru, 2.8

China, 3.7

Thailand, 2.0Romania, 1.0

Philippines, 1.5Kazakhstan, 1.0

India, 2.0 Ukraine, 1.7

Chile, 2.5

Dom. Rep., 1.1

Korea (South), 0.5

Venezuela, 0.2

Panama, 0.9Srilanka, 0.9UAE, 2.5 Cash, 2.6

Turkey, 16.4

Russia, 21.4

South Africa, 18.3

Poland, 10.9

Hungary, 8.0

Romania, 4.4

Kazakhstan, 4.3

Ukraine, 7.6Croatia, 2.2

Serbia, 1.1

Lithuania, 0.1

Slovenia, 0.0Azerbaijan, 1.7

Czechrepublic, 3.00.4

0.00.0 0.2 0.0 Cash, 1.0

Indonesia, 34.5

Malaysia, 10.0

China, 16.7

Thailand, 9.3

Philippines, 7.0

India, 9.0

Korea (South), 2.3Srilanka, 3.9

Hongkong, 2.6

Pakistan, 1.4Singapore, 1.6Vietnam, 0.7

Mongolia, 0.8Bangladesh, 0.0

Taiwan, 0.1Cash, 2.9

Brazil, 23.3

Mexico, 21.5

Colombia, 13.2

Argentina, 8.3

Peru, 8.6

Chile, 7.7

Dom. Rep., 3.4

Venezuela, 0.7Panama, 2.9

Uruguay, 2.0

Costa Rica, 1.1

Paraguay, 1.0

Jamaica, 0.9

Elsalvador, 1.2

Ecuador, 2.9Guatemala, 0.6 0.1

0.3Cuba, 0.0Cash, 0.9

USA, 52.8

Euro, 21.3

UK, 7.6

Japan, 5.9Canada, 2.8

Australia, 1.5

Sweden, 0.0Switzerland, 0.8Denmark, 0.2Newzealand, 0.0 Norway, 0.3 Cash, 3.4

France, 26.3

Germany, 14.8

Italy, 20.1

Netherlands, 10.6

Spain, 11.9Belgium, 3.4

Austria, 1.3

Ireland, 3.7

Portugal, 0.9

Finland, 0.8Greece, 0.50.1 0.0

0.0Slovakia, 0.1 Cash, 1.7


4

Emerging Markets


5

Emerging Markets – Summary themes • Hard currency funds remain the chief beneficiary of emerging markets inflows.

Another 0.9% of assets under management (AUM) were added in the past month, and cumulates to 3.6% in the past quarter. Dollar robustness and comfort revolving around maintenance of low core rates remain driving factors.

• Local currency funds had seen outflows against this backdrop. Not a haemorrhage, but a tendency. That changed in the past month though, as local currency funds saw some moderate inflows. This has also been reflected in total returns as local currency in fact has been outperforming of late.

• We also note that professional players have been the dominant buyers of emerging markets in the past few month, and in fact retail have remained set sellers of local currency bonds in the past month.

Fig 9 Feature Chart: Hard currency inflows dominate, but local currency not seeing outflows in the past month


• The asset allocation picture shows a reduction in allocation to Latam, now down to 31.6% versus 34.3% a year ago, and allocation has been slipping lower in the past couple of months. Colombia and Brazil have seen a reduction, as has allocation to Argentina.

• Allocation to EMEA has been steady in the past couple of months at 19.4%, although down from 20.6% a year ago. Allocation to Turkey, S Africa and Poland has been falling in the past couple of months.

• Allocation to Asia has been steady to moderately higher over recent months, bolstered by added exposure to Indonesia and China, while allocation to Malaysia, Thailand and India is lower.

• Allocation to the Middle East is up, where we note an increased allocation to Saudi Arabia. And allocation to N Africa is stead to a tad lower, where we note some downsizings in allocation to Nigeria.

BOTTOM LINE: Local currency has been outperforming hard currency for a change this month. This gels with some resumed inflows into local currency, even though the inflows to hard currency remain more impressive. The relative stability of core rates alongside a dollar that remains at or near highs on many crosses keeps the hard currency inflow process intact. The prognosis ahead is for Fed cuts to slow, so cuts from emerging market central banks will be more selective and more macro justified, which should be more supportive of local currency performance. Changes in global allocations are mostly reflective of relative stresses, with reductions in allocations to Turkey, S Africa and Argentina impactful. Less of these direct stresses in Asia see a steadier allocation there.

0

100

200

300

400

500

600

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

EM Hard (all investors) EM Local (all investors) EM Blend (all investors) EM Total (all investors)

$ million $bn (cumulative AUM)


6

Emerging Markets Net Fund Flows

Fig 10 Emerging Markets - Change in the past week (%) Fig 11 Emerging Markets - Change in past week (US$m)


Fig 12 Emerging Markets - Change in the past month (%) Fig 13 Emerging Markets - Change in past month (US$m)


Fig 14 Emerging Markets - Change in past quarter (%) Fig 15 EM - Change in past quarter (US$m)


Fig 16 Emerging Markets - Change in the past year (%) Fig 17 Emerging Markets - Change in past year (US$m)


-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

Total Professional Retail

EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM

% AUM PAST WEEK

-600

-400

-200

0

200

400

600

800

1000

1200



$ millions PAST WEEK

-2.50

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50



% AUM PAST MONTH

-1000

-500

0

500

1000

1500

2000

2500

3000

3500



$ millions PAST MONTH

-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00



% AUM PAST QUARTER

-4000

-2000

0

2000

4000

6000

8000

10000



$ millions PAST QUARTER

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00



% AUM PAST YEAR

-15000-10000

-50000

5000100001500020000250003000035000



$ millions PAST YEAR


7

Global EM Manager Asset Allocations Fig 18 GEM allocations one month ago (%) Fig 19 GEM detailed allocations one month ago (%)


Fig 20 GEM allocations two months ago (%) Fig 21 GEM detailed allocations two months ago (%)


Fig 22 GEM allocations one quarter ago (%) Fig 23 GEM detailed allocations one quarter ago (%)


Fig 24 GEM allocations one year ago (%) Fig 25 GEM detailed allocations one year ago (%)


Africa, 9.4

Asia Ex-Japan, 22.3

Other, 1.3


Middle East, 11.0

Latin America, 31.6

Brazil, 7.2

Mexico, 7.2

Indonesia, 7.7

Turkey, 3.5

Russia, 4.8


Argentina, 1.5Malaysia, 2.1Hungary, 1.8Peru, 2.7

China, 3.8




Chile, 2.5

Dom. Rep., 1.3

Korea (South), 0.5

Venezuela, 0.3


Africa, 9.3

Asia Ex-Japan, 22.3

Other, 2.3


Middle East, 10.3

Latin America, 32.9

Brazil, 7.5

Mexico, 7.0

Indonesia, 7.6

Turkey, 3.7

Russia, 4.9



Hungary, 1.8Peru, 2.8

China, 3.7




Chile, 2.5

Dom. Rep., 1.1

Korea (South), 0.5

Venezuela, 0.2


Africa, 9.6

Asia Ex-Japan, 21.5

Other, 4.3


Middle East, 9.9

Latin America, 33.7

Brazil, 7.4

Mexico, 7.3

Indonesia, 7.5

Turkey, 3.6

Russia, 4.7



Hungary, 1.8

Peru, 2.9

China, 3.1




Chile, 2.8

Dom. Rep., 1.2

Korea (South), 0.4

Venezuela, 0.5


Africa, 8.9

Asia Ex-Japan, 21.2

Other, 13.3


Middle East, 7.7

Latin America, 34.3

Brazil, 7.0

Mexico, 8.0

Indonesia, 6.3

Turkey, 3.3

Russia, 4.7



Hungary, 2.2

Peru, 2.9

China, 3.6




Chile, 2.3

Dom. Rep., 1.3

Korea (South), 0.6

Venezuela, 0.4



8

Regional EM Manager Asset Allocation Fig 26 EMEA allocations one month ago (%) Fig 27 EMEA allocations two months ago (%)


Fig 28 Asia allocations one month ago (%) Fig 29 Asia allocations two months ago (%)


Fig 30 Latam allocations one month ago (%) Fig 31 Latam allocations two months ago (%)


Fig 32 Africa & ME allocations one month ago (%) Fig 33 Africa & ME allocations two months ago (%)


Turkey, 15.6

Russia, 21.3

South Africa, 17.6Poland, 10.0

Hungary, 7.8

Romania, 4.9

Kazakhstan, 4.7


Serbia, 1.1Lithuania, 0.3



0.00.0 0.30.0Cash, 0.0

Turkey, 16.4

Russia, 21.4

South Africa, 18.3

Poland, 10.9

Hungary, 8.0

Romania, 4.4

Kazakhstan, 4.3


Serbia, 1.1

Lithuania, 0.1



0.00.0 0.2 0.0 Cash, 1.0

Indonesia, 35.0

Malaysia, 9.8

China, 17.2

Thailand, 8.4

Philippines, 6.9

India, 8.9


Hongkong, 2.1

Pakistan, 1.3Singapore, 1.7 Vietnam, 0.9Mongolia, 0.9 Bangladesh, 0.0


Indonesia, 34.5

Malaysia, 10.0

China, 16.7

Thailand, 9.3

Philippines, 7.0

India, 9.0


Hongkong, 2.6

Pakistan, 1.4Singapore, 1.6Vietnam, 0.7

Mongolia, 0.8Bangladesh, 0.0


Brazil, 23.2

Mexico, 23.2

Colombia, 11.3Argentina, 4.8

Peru, 8.6

Chile, 8.2

Dom. Rep., 4.1


Uruguay, 2.2

Costa Rica, 1.2

Paraguay, 1.4

Jamaica, 1.1

Elsalvador, 1.5

Ecuador, 3.4Guatemala, 0.9

0.1 0.4 Cuba, 0.0Cash, 2.1

Brazil, 23.3

Mexico, 21.5

Colombia, 13.2

Argentina, 8.3

Peru, 8.6

Chile, 7.7

Dom. Rep., 3.4


Uruguay, 2.0

Costa Rica, 1.1

Paraguay, 1.0

Jamaica, 0.9

Elsalvador, 1.2

Ecuador, 2.9Guatemala, 0.6 0.1

0.3Cuba, 0.0Cash, 0.9

UAE, 20.0

Israel, 5.8

Ivorycoast, 3.9

Lebanon, 2.3

Ghana, 5.3Zambia, 0.7

Nigeria, 8.6Egypt, 13.4

Kenya, 3.40, 0.0

Gabon, 1.3

Tunisia, 1.4

Namibia, 0.6

Iraq, 1.7Ethiopia, 0.5

Oman, 6.3

0.2Bahrain, 3.9

Rwanda, 0.5Jordan, 1.0

Saudi Arabia, 18.80.1

UAE, 19.4

Israel, 5.8

Ivorycoast, 3.5

Lebanon, 2.7

Ghana, 5.4

Zambia, 0.8

Nigeria, 9.3Egypt, 13.8

Kenya, 3.30, 0.0

Gabon, 0.9

Tunisia, 1.2

Namibia, 0.6

Iraq, 1.7Ethiopia, 0.5

Oman, 7.0

0.1Bahrain, 3.9

Rwanda, 0.4Jordan, 1.2

Saudi Arabia, 18.00.1


9

Selected EMEA and Latam Country Flows Fig 34 EMEA – Change in the past week (%) Fig 35 EMEA – Change in the past month (%)


Fig 36 EMEA – Change in the past quarter (%) Fig 37 EMEA – Change in the past year (%)


Fig 38 Latam – Change in the past week (%) Fig 39 Latam – Change in the past month (%)


Fig 40 Latam – Change in the past quarter (%) Fig 41 Latam – Change in the past year (%)


0 0.05 0.1 0.15 0.2 0.25 0.3 0.35

Czech

Hungary

Kazakhstan

Poland

Romania

Russia

S Africa

Turkey

Ukraine

Total…% AUM PAST WEEK

0 0.2 0.4 0.6 0.8 1 1.2

Czech

Hungary

Kazakhstan

Poland

Romania

Russia

S Africa

Turkey

Ukraine

Total…% AUM PAST MONTH

0 0.5 1 1.5 2 2.5 3

Czech

Hungary

Kazakhstan

Poland

Romania

Russia

S Africa

Turkey

Ukraine

Total…

% AUM PAST QUARTER

0 1 2 3 4 5 6 7 8

Czech

Hungary

Kazakhstan

Poland

Romania

Russia

S Africa

Turkey

Ukraine

Total…

% AUM PAST YEAR

-0.7 -0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0.0 0.1 0.2 0.3 0.4

Argentina

Brazil

Colombia

Mexico

Peru

Venezuela

Total (Selected Latam)

% AUM PAST WEEK

-0.3 -0.2 -0.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6

Argentina

Brazil

Colombia

Mexico

Peru

Venezuela

Total (Selected Latam)

% AUM PAST MONTH

0.0 0.5 1.0 1.5 2.0 2.5

Argentina

Brazil

Colombia

Mexico

Peru

Venezuela

Total (SelectedLatam)

% AUM PAST QUARTER

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Argentina

Brazil

Colombia

Mexico

Peru

Venezuela

Total (SelectedLatam)

% AUM PAST YEAR


10

Selected Asia and ME/Africa Country Flows Fig 42 Asia – Change in the past week (%) Fig 43 Asia – Change in the past month (%)


Fig 44 Asia – Change in the past quarter (%) Fig 45 Asia – Change in the past year (%)


Fig 46 Middle East & Africa – In the past week (%) Fig 47 Middle East & Africa – In the past month (%)


Fig 48 Middle East & Africa – In the past quarter (%) Fig 49 Middle East & Africa – In the past year (%)


-0.2 0 0.2 0.4 0.6 0.8 1

China

India

Indonesia

Malaysia

Mongolia

Pakistan

Philippines

S Korea

Thailand

Vietnam

Total (Selected Asia EM)

% AUM PAST WEEK

-0.5 0 0.5 1 1.5 2 2.5

China

India

Indonesia

Malaysia

Mongolia

Pakistan

Philippines

S Korea

Thailand

Vietnam

Total (Selected Asia EM)% AUM PAST MONTH

0 0.5 1 1.5 2 2.5 3 3.5

China

India

Indonesia

Malaysia

Mongolia

Pakistan

Philippines

S Korea

Thailand

Vietnam

Total…% AUM PAST QUARTER

-10 -8 -6 -4 -2 0 2 4 6 8 10 12

China

India

Indonesia

Malaysia

Mongolia

Pakistan

Philippines

S Korea

Thailand

Vietnam

Total (Selected Asia EM)

% AUM PAST YEAR

0.0 0.1 0.2 0.3 0.4

BahrainEqyptIsrael

JordanKuwait

LebanonQatar

TunisiaUEA

Total (Selected ME & NA)Ivory Coast

NigeriaTotal (Selected Sub-Sahara)

% AUM PAST WEEK

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

BahrainEqyptIsrael

JordanKuwait

LebanonQatar

TunisiaUEA

Total…Ivory Coast

NigeriaTotal…

% AUM PAST MONTH

0.0 0.5 1.0 1.5 2.0 2.5

BahrainEqyptIsrael

JordanKuwait

LebanonQatar

TunisiaUEA

Total…Ivory Coast

NigeriaTotal…

% AUM PAST QUARTER

0.0 2.0 4.0 6.0 8.0

BahrainEqyptIsrael

JordanKuwait

LebanonQatar

TunisiaUEA

Total (Selected ME & NA)Ivory Coast

NigeriaTotal (Selected Sub-Sahara)

% AUM PAST YEAR


11

High Yield


12

High Yield – Summary themes

• No net inflows in the past week, but over the past months the high yield space has been a story of persistent net inflows. Assets under management (AUM) are up 1.4% in the past month and up 2.5% in the past quarter.

• Professionals have been the dominant marginal buyers of high yield. In the past month professional accounts increased AUM in high yield by 3.6% compared with a 0.8% increase for retail AUM.

• USD high yield has seen the biggest of the inflows in the past month, as AUM increased by 1.2%, although it has been flat in the past week.

Fig 50 Feature Chart: Decent increase in flows into USD high yield in the past month


• In contrast, European high yield had been seeing a larger relative percentage increase in AUM, but this has slowed in the past month. This in part reflects a slowing of anticipation buying ahead of the ECB’s QE re-ignition announcement.

• USD high yield continues to outpace USD emerging markets returns, with the former running at 11.5% versus 10.7% for the latter, while European high yield translated back into USD is running at 9.6%. These compensations partly reflect a tame recession risk.

• Anything that elevates the recession risk would do the same for default risk, which would hurt HY generally. So far though the cushion being offered by likely Fed cuts is acting to dominant recession sentiment, although the rise in the USD downgrade/upgrade ratio is worthy of attention.

BOTTOM LINE: Inflows to corporate high yield product remains firm, not in the past week, but certainty in the past few months. We find that professionals have been the bigger buyers, in excess of the bid from pure retail. The bulk of the more recent inflows have been into USD high yield, with W Europe high yield taking a breather following ECB QE inspired inflows in previous months. If the performance of high yield is anything to go by, there is minimal recession fear in play here. That said, with total returns as impressive as they are there should be an accelerated temptation to lock in gains.

0

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-10.0

-8.0

-6.0

-4.0

-2.0

0.0

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8.0

US High Yield Weekly Flow $bn (LHS) US High Yield Cumulative AUM $bn (RHS)

$bn (weekly flow) $bn (cumulative AUM)USD High Yield


13

Fig 51 Western Europe High Yield Weekly Flows


Fig 52 US High Yield Weekly Flows


Fig 53 Emerging Markets Weekly Flows – all currencies


0

20

40

60

80

100

120

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

EU High Yield Weekly Flow $bn (LHS) EU High Yield Cumulative AUM $bn (RHS)

$bn (weekly flow) $bn (cumulative AUM)W Europe High Yield (in $)

0

100

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-8.0

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US High Yield Weekly Flow $bn (LHS) US High Yield Cumulative AUM $bn (RHS)

$bn (weekly flow) $bn (cumulative AUM)USD High Yield

0

100

200

300

400

500

600

-8,000

-6,000

-4,000

-2,000

0

2,000

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6,000

EM Hard (all investors) EM Local (all investors) EM Blend (all investors) EM Total (all investors)

$ million $bn (cumulative AUM)


14

Developed Markets


15

Developed Markets – Summary themes • Cash continues to flow into long end government funds, in turn keeping long end

rates under wraps. This has been especially notable in the past week or so, and contrasts with net selling in short end funds. Optically this is a duration extension.

• If we look at the past 3 months we find that the market-place has extended duration exposure, as steady assets under management (AUM) in front end funds contrast with a 3.8% increase in AUM for long end funds.

• In contrast, most of the cash going into corporate funds is going into belly funds. Not unusual given the maturity preference in corporate space, but the degree of inflows into belly funds versus the wings has been quite pronounced.

• Inflows to corporates generally have slowed in the past week, but this is not out of kilter from what has been seen for other risk assets in the bond space. That apart, the stand-out stat is the 3.1% increase in AUM in belly funds in the past quarter.

Fig 54 Feature Chart: Inflows to long end govies and belly maturity corporate funds


• Allocation to USD bonds remains elevated at 52.6%, albeit down slightly from 5.2% for the previous month. But this is well up on the allocation of 48.2% seen a year ago. Allocation to the Eurozone has declined in tandem, from 23.1% to 21.1% over the same period, alongside a decline in allocation to Germany over this period.

• The steady trickle of inflows into USD inflation funds continues. This a reversal of prior outflows though, and there is still some way to go before squaring up. In the past quarter AUM here is up 2.9%, but still down 7.5% in the past year.

• European inflation funds have been less in favour; there has been a further reduction of 1.5% in AUM in the past month, and overall AUM in European inflation is down 8.1% in the past year.

BOTTOM LINE: A striking flow in developed markets have been into long end government funds, while the opposite has been happening on the front (outlfows). So the market has been getting longer on duration again. In the corporate bonds, a strong inflow to belly funds has been a feature of recent months, although inflows have slowed in the past week or so. We also note the increased allocation to US bonds over the past year, no doubt a key support for rates, spread and currency. In inflation space, inflows to USD funds continue, partly a reverse of a prior exodus, while European inflation funds have yet to see a material reversal of prior outflows.

-5.00-4.00-3.00-2.00-1.000.001.002.003.004.005.00



% AUM PAST QUARTER


16

Fig 55 Change in the past week (%) Fig 56 Change in the past week (%)


Fig 57 Change in the past month (%) Fig 58 Change in the past month (%)


Fig 59 Change in the past quarter (%) Fig 60 Change in the past quarter (%)


Fig 61 Change in the past year (%) Fig 62 Change in the past year (%)


-6.00-5.00-4.00-3.00-2.00-1.000.001.002.003.004.00



% AUM PAST WEEK

-1.00-0.80-0.60-0.40-0.200.000.200.400.600.801.001.20

High Yield Inflation Money Markets

North America W Europe Total

% AUM PAST WEEK

-6.00

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00



% AUM PAST MONTH

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

2.50



% AUM PAST MONTH

-5.00-4.00-3.00-2.00-1.000.001.002.003.004.005.00



% AUM PAST QUARTER

-2.00-1.000.001.002.003.004.005.006.007.008.00



% AUM PAST QUARTER

-5.00

0.00

5.00

10.00

15.00

20.00

25.00



% AUM PAST YEAR

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00



% AUM PAST YEAR


17

Global DM Manager Asset Allocations Fig 63 Eurozone allocations one month ago (%) Fig 64 Global DM allocations one month ago (%)


Fig 65 Eurozone allocations two months ago (%) Fig 66 Global DM allocations two months ago (%)


Fig 67 Eurozone allocations one quarter ago (%) Fig 68 Global DM allocations one quarter ago (%)


Fig 69 Eurozone allocations one year ago (%) Fig 70 Global DM allocations one year ago (%)


France, 25.6

Germany, 14.8

Italy, 19.7

Netherlands, 11.7


Austria, 1.1

Ireland, 4.1

Portugal, 0.8

Finland, 0.9 Greece, 0.50.1 0.0 0.0Slovakia, 0.1 Cash, 1.9

USA, 52.6

Euro, 21.1

UK, 8.0


Australia, 1.4


France, 26.3

Germany, 14.8

Italy, 20.1

Netherlands, 10.6


Austria, 1.3

Ireland, 3.7

Portugal, 0.9

Finland, 0.8Greece, 0.50.1 0.0

0.0Slovakia, 0.1 Cash, 1.7

USA, 52.8

Euro, 21.3

UK, 7.6


Australia, 1.5


France, 26.8

Germany, 15.1

Italy, 18.5

Netherlands, 10.5

Spain, 12.4

Belgium, 2.9

Austria, 1.4

Ireland, 3.6

Portugal, 1.6

Finland, 0.7 Greece, 1.20.1

0.0 0.0Slovakia, 0.0 Cash, 2.7

USA, 50.0

Euro, 22.6

UK, 7.8


Australia, 1.9


France, 23.9

Germany, 17.4

Italy, 18.9

Netherlands, 8.1

Spain, 13.6

Belgium, 4.0

Austria, 1.2

Ireland, 3.5

Portugal, 1.7

Finland, 0.8Greece, 0.40.8 0.0 0.0Slovakia, 0.1 Cash, 2.9

USA, 48.2

Euro, 23.1

UK, 7.9


Australia, 2.1



18

Developed Markets Country Flows Fig 71 Eurozone – Change in the past week (%) Fig 72 Non Eurozone – Change in the past week (%)


Fig 73 Eurozone – Change in the past month (%) Fig 74 Non Eurozone – Change in the past month (%)


Fig 75 Eurozone – Change in the past quarter (%) Fig 76 Non Eurozone – Change in the past quarter (%)


Fig 77 Eurozone – Change in the past year (%) Fig 78 Non Eurozone – Change in the past year (%)


-0.1 -0.05 0 0.05 0.1 0.15 0.2 0.25 0.3

AustriaBelgium

CyprusFinlandFrance

GermanyGreeceIreland

ItalyNetherlands

PortugalSpain

Total (Selected Eurozone)

% AUM PAST WEEK

0 0.1 0.2 0.3 0.4 0.5

AustraliaHong Kong

JapanNew Zealand

SingaporeIceland

DenmarkNorwaySweden

SwitzerlandUK

CanadaUS

Total…% AUM PAST WEEK

0 0.1 0.2 0.3 0.4 0.5

AustriaBelgium

CyprusFinlandFrance


ItalyNetherlands

PortugalSpainTotal…

% AUM PAST MONTH

0 0.5 1 1.5 2

AustraliaHong Kong

JapanNew Zealand

SingaporeIceland

DenmarkNorwaySweden

SwitzerlandUK

CanadaUS

Total…% AUM PAST MONTH

0 0.5 1 1.5 2 2.5 3

Austria

Belgium

Cyprus

Finland

France

Germany

Greece

Ireland

Italy

Netherlands

Portugal

Spain

Total (Selected Eurozone)

% AUM PAST QUARTER

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

AustraliaHong Kong

JapanNew Zealand

SingaporeIceland

DenmarkNorwaySweden

SwitzerlandUK

CanadaUS

Total (Selected Non Eurozone)

% AUM PAST QUARTER

0 0.5 1 1.5 2 2.5 3 3.5

AustriaBelgium

CyprusFinlandFrance


ItalyNetherlands

PortugalSpainTotal…

% AUM PAST YEAR

-2 -1 0 1 2 3 4 5 6 7 8

AustraliaHong Kong

JapanNew Zealand

SingaporeIceland

DenmarkNorwaySweden

SwitzerlandUK

CanadaUS

Total (Selected Non Eurozone)% AUM PAST YEAR


19

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Emerging Markets – Summary themesEmerging Markets Net Fund FlowsGlobal EM Manager Asset AllocationsRegional EM Manager Asset AllocationSelected EMEA and Latam Country FlowsSelected Asia and ME/Africa Country FlowsHigh Yield – Summary themesDeveloped Markets – Summary themesGlobal DM Manager Asset AllocationsDeveloped Markets Country FlowsDisclaimer

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