Weekly Fund Flows：A reprieve for equity flows

　　Last week’s (Wed-Wed) review of funds’ in/outflows as % of funds’ AuM.

　　Improving macro data surprises and the Fed’s positive take on the currentenvironment helped risk asset flows to bounce back last week after severalweeks of sharp outflows. Weekly net flows into DM equity funds turnedpositive after 7 weeks of outflows, largely driven by inflows into US equityfunds but also by slowing withdrawals from European equity funds.

　　While US equity funds managed to gain from significant ETF inflows, whichwere able to overturn the continuous MF redemptions, ongoing politicaluncertainties continue to keep European equity flows in check. Although at aslowing pace, redemptions have continued for the 17th week in a row.

　　Across asset classes –bonds (~) & equities (~) vs. MM (-),:Last week, broadbasedmutual fund redemptions were offset by significant ETF inflows (highestsince April, 2016) consequently pushing Total equity funds (+0.0%, MFs: -0.1%, ETFs: +0.3%) into marginal positive territory Bond funds (+0.1%)experienced inflows for the ninth consecutive week on the back of inflows intoDM bond funds (+0.1%) & Credit funds (+0.0%). MM fund flows (-0.2%)continued to be patchy as they experienced outflows, compared to significantinflows last week.

　　DM equity funds (+) –US (+) & Japan (+) vs Western Europe (~) : Developedmarket funds (+0.0%, MFs: -0.1%, ETFs: +0.3%) experienced marginal inflowsthis week as decent inflows into US (+0.0%, MFs: -0.2%, ETFs: +0.4%) andJapan equity funds (+0.1%, MFs: -0.1%, ETFs: +0.2%) were supported byslowing redemptions from Europe equity funds (-0.1%, MFs: -0.0%, ETFs: -0.2%).

　　In Japan the rise in industrial production and improvements in labor marketalong with the decision to postpone consumption tax could be initial signs ofan economic recovery, which helped Japan funds (+0.1%) to experiencedecent inflows.

　　EM equity funds (-) –Asia ex Jap (+) vs EMEA (-) & LatAm(-}: EM funds(+0.0%, MFs: -0.0%, ETFs: +0.2%) experienced marginal inflows as gains inAsia ex Jap funds (+0.0%, MFs: -0.1%, ETFs: +0.2%) were offset by outflowsfrom Lat-Am (-0.5%, MFs: -0.1%, ETFs: -0.8%) & EMEA (-0.0%, MFs: -0.0%,ETFs: -0.1%) funds.

　　Bond funds (+) with IG (+) & DM bonds (+) vs HY (-) & Sov bonds (-): Totalbond inflows (+0.1%) continued for the 9th straight week driven by inflowsinto IG Bond funds (+0.2%) and DM bond funds (+0.1%). There has been amini rotation within Credit funds (+0.0%) into IG funds away from HY ascontinuous IG bond inflows have been countered by HY redemptions. IG bondfunds have witnessed highest cum. inflows during the previous month (see topchart) High-yield redemptions (-0.1%) continued for the 5th week as US (-0.3%)and Europe high-yield mandates (-0.1%) continued to see outflows. DM bondfunds (+0.1%) have been in the positive territory since April, 16 as continuousinflows into US (+0.0%) and Western Europe (+0.1%) bonds have only beenpartially offset by Japanese bond (-0.2%) outflows.德意志银行