Fund Flow Insights_ Flows turned mostly negative as US ETFs saw redemptions

Summary of Fund Flow Insights - December 27, 2024 Industry Overview - The report focuses on the equity fund flows in both Developed Markets (DM) and Emerging Markets (EM) as of December 27, 2024, highlighting significant outflows and inflows across various regions and fund types. Key Points Fund Flows - Total Outflow from Equity Funds: There was a significant outflow of US$26.6 billion** from equity funds in the week leading up to Christmas, primarily driven by **US ETFs** which experienced **US$38.7 billion in net redemptions [22][23]. - Bond Funds Inflow: In contrast, bond funds saw an inflow of US$2.1 billion** during the same period [22]. - **Global Funds Inflow**: Despite the outflows in equity funds, global funds enjoyed an inflow of **US$7.5 billion [22]. - Money Market Funds: European money market funds faced an outflow of US$11.7 billion** last week, contributing to a total outflow of **US$42.5 billion over the past three weeks [22]. Regional Insights - Emerging Markets: EM funds experienced an outflow of US$1.1 billion**, with **US$1.3 billion leaving China funds for the second consecutive week. However, GEM funds had a small inflow of US$0.7 billion** [2]. - **Asia Markets**: The Asia markets saw significant foreign selling, with Korea experiencing **US$0.7 billion in net foreign outflow, and Japan facing US$3.1 billion in foreign selling [23]. - North America: North American equity funds faced substantial outflows, contributing to the overall negative sentiment in the region [22]. Performance Metrics - Equity Fund Performance: The report includes various performance metrics, indicating a negative trend in equity fund flows compared to bond funds, which have shown resilience [22][32]. - Market Allocation: The estimated flows into a market's equity market are calculated by taking the fund flow into a fund group and multiplying it by the group's market allocation [42]. Additional Insights - ETF vs Non-ETF Flows: The report highlights the performance of ETFs versus non-ETFs, indicating a trend where ETFs are more susceptible to redemptions compared to non-ETF funds [22][53]. - Long-term Trends: The report provides a 52-week cumulative view of fund flows, showing the ongoing shifts in investor preferences between equity and bond markets [34][39]. Conclusion - The current fund flow dynamics indicate a cautious sentiment among investors, particularly in equity markets, with significant outflows from US ETFs and a contrasting inflow into bond funds. The trends observed in the Asia markets and the overall performance metrics suggest a need for investors to reassess their strategies in light of these developments.