Flows into EPFR Global-tracked Gold Funds hit an 11-week high during the first week of June as sector-focused investors positioned themselves ahead of another round of major central bank meetings, legislative elections in France and the U.K. and further political drama in Washington, D.C., in the form of former FBI Director James Comey’s testimony to a Senate committee. The week also saw Energy Sector Funds attract another $420 million, Financial and Technology Sector Funds extend their longest inflow streaks since the first quarter of 2016 and 2011, respectively. Flows into Consumer Goods Sector Funds jumped to a 117-week high while Industrial Sector Funds recorded their biggest outflow in two and a half years and investors pulled money out of Real Estate Sector Funds for the 11th consecutive week.
The bulk of the flows into Consumer Goods Sector Funds went to a single U.S.-domiciled ETF and followed three straight weeks of net redemptions that were more in keeping with the modest wage growth evident in most developed economies and the cautious attitude on the part of U.S. consumers towards taking on more debt.
Although the failure of U.S. President Donald Trump’s administration to advance much of its economic agenda has sapped enthusiasm for Sector Fund groups such as Financial Sector Funds, investors remain sanguine that some kind of infrastructure program will be passed ahead of next year’s Congressional elections. The latest flows into Infrastructure Sector Funds were the largest since the second week of November.
Year-to-date retail investors have favored Technology Sector Funds while redeeming over $3 billion from Real Estate and Technology Sector Funds. Institutional flows have favored Commodities and Financial Sector Funds. When flows are filtered by major currency, European investors favor Technology Funds, U.S. investors Technology and Financial Funds and Japanese investors are exiting all with Real Estate Sector Funds taking the hardest hit.
Cameron Brandt is Director of Research for EPFR Global, an Informa Financial Intelligence company.
