Bond fund inflows hit 18 month high while equity fund inflows solid

Having digested forecasts for 2012 in which the phrase "muddle through" appeared early and often – especially in relation to the embattled Eurozone – investors piled into several major bond fund groups during the week ending 11 January.

Municipal Bond Funds posted their biggest weekly inflow in over two years, flows into Global Bond Funds hit a 31 week high, High Yield Bond Funds took in nearly USD2 billion and Europe Bond Funds snapped a 17 week losing run as EPFR Global-tracked Bond Funds collectively absorbed an 82 week high of USD6.39 billion.

Equity Funds also absorbed over USD6 billion, with Emerging Market Equity Funds accounting for USD1.84 billion of the weekly total, as actively managed funds attracted fresh money for the first time since early November. Equity funds with a dividend focus extended an inflow streak that stretches back to early August: since the beginning of 2010 these funds have only posted outflows eight times in 106 weeks.

At the country level investors took another look at Asia and parts of the EMEA region, with Australia and Indonesia Equity Funds seeing strong inflows and EMEA Equity Funds posting inflows for the first time in 10 weeks.

Flows into Money Market Funds jumped to a five week high of USD15.8 billion, with Europe Money Market Funds accounting for close to 60% of that total.