Global Navigator | Markets brace for higher yields and interest rate decisions

Investors returning from the summer holidays in early September ran into yields on government debt hitting their highest level since the Great Financial Crisis, made bets on which direction the Federal Reserve’s interest rate path will go and watched oil prices rise as the Iran conflict entered its sixth month.

The week leading into Sept 2 saw Money Market Funds post a four-week high inflow of nearly $30 billion, Bond Funds absorb another $18 billion, and Alternative Funds extend their longest inflow streak since late January on the account of investor appetite for gold and crypto plays. Balanced Funds pulled in the biggest inflows over the past two months at over $4 billion and Equity Funds posted the smallest headline number of their current nine-week inflow streak.

EPFR’s Random Walk of flows into all Bond Funds versus all Equity Funds this year has, so far, followed a similar path to the last two years. Investors have continued to commit fresh money to equities and fixed income assets at a steady pace, peaking around 2.8% and 7% of their beginning-of-year AUMs, respectively with 17 more weeks in the year to go.