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Economic Times
2 days ago
- Business
- Economic Times
Cameron Brandt says Trump-Putin meeting unlikely to spark major market shifts
India is a major provider of affordable pharmaceuticals to the US, and people are trying to make sense of what that might mean both for India and for US healthcare policy. Synopsis Geopolitical events have limited long-term impact on fund flows, with investors often viewing dips as buying opportunities. While some money is slowly exiting the US amidst tariff negotiations, it's primarily moving into liquidity funds. India's fund inflows, previously recovering, have been impacted by new tariffs, particularly on pharmaceuticals, creating uncertainty in the market. "In terms of market impact, however, from where we sit—watching big universal mutual fund and ETF flows—geopolitics has really not been a meaningful long-term driver of flows for quite some time," says Cameron Brandt, EPFR Global. ADVERTISEMENT Firstly, let us talk about what you think will really come out of Trump and Putin's meeting in Alaska, because it seems like there could be some resolution to the war in Ukraine. Cameron Brandt: Well, the war has been going on for so long and so much has been invested in it by multiple actors that hoping for a resolution within just a week or so is overly optimistic. That said, there is definitely some fatigue on the Russian side, and Trump taking a stronger line might encourage them to look for a terms of market impact, however, from where we sit—watching big universal mutual fund and ETF flows—geopolitics has really not been a meaningful long-term driver of flows for quite some time. It will sometimes move the needle week to week, but partly because of the enormous post-Great Financial Crisis liquidity, investors have become conditioned to see geopolitical events as providing a short dip that they should buy into. So, I am not going to predict any enormous shifts, even if we get the best-case scenario next week. So, what is going to drive the movement of flows? Amidst all the tariff negotiations, are you already seeing money move out of the US, and is that money being deployed into other emerging markets? Or do you think people are still in just a wait-and-watch mode? Cameron Brandt: More wait-and-watch than redeploy. We are seeing a little bit of money move out of the US, and we are certainly seeing fund managers who have the option of reducing their exposure to the US—by this I mean global equity funds with a truly global mandate—they have certainly been trimming their exposure, but without a full-on rush to the exits. We are not seeing significant outflows from US funds. It has been more of a slow grind— a few billion here, a few billion there—and people are certainly on edge. But the moment there was some clarity on tariffs with the two key trading partners, the EU and Japan, there was definitely a pickup in flows back into dedicated US equity funds. I do think the tariff uncertainty is not helping, but as you mentioned before I joined you, US markets continue to move higher and the general market sentiment is that this too shall pass. ADVERTISEMENT Also, help us understand a little more about these fund flows we have seen. While you say that flows out of the US have not been very significant, flows into the US are also not looking very attractive right now. But you have seen significant outflows from China, Taiwan, and other markets. Help us understand where these fund flows are actually going and where India stands amid all of this, because we have also seen consistent FII selling in India. Cameron Brandt: To answer the first question: recently, funds have been moving into liquidity funds. Last week, US and Europe money market funds absorbed about a hundred billion dollars, so I think that at the moment is the main offramp for the US flows, four, five, six billion dollars represent only 0.01% of the total AUM of the US equity funds we track, so we are seeing a trend away from US assets, but it is not a very strong one—certainly not yet. In terms of emerging markets, no, we are not seeing much of a rotation toward them. There was a little thaw coming into the third quarter, and there has been more interest on the emerging market debt side than on emerging markets equity. ADVERTISEMENT Flows into dedicated India funds were recovering until the latest inflection point caused by higher tariffs due to India's consumption of Russian oil. What is worrying people more, in many ways, are the pharmaceutical tariffs. India is a major provider of affordable pharmaceuticals to the US, and people are trying to make sense of what that might mean both for India and for US healthcare there is more uncertainty to navigate, but once that uncertainty goes away, I think you will see more money come back into the US, and India—which was doing quite well until this happened—will probably start to see things pick up as well. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel) NEXT STORY
Time of India
2 days ago
- Business
- Time of India
Cameron Brandt says Trump-Putin meeting unlikely to spark major market shifts
"In terms of market impact, however, from where we sit—watching big universal mutual fund and ETF flows—geopolitics has really not been a meaningful long-term driver of flows for quite some time," says Cameron Brandt , EPFR Global . Firstly, let us talk about what you think will really come out of Trump and Putin's meeting in Alaska, because it seems like there could be some resolution to the war in Ukraine. Cameron Brandt: Well, the war has been going on for so long and so much has been invested in it by multiple actors that hoping for a resolution within just a week or so is overly optimistic. That said, there is definitely some fatigue on the Russian side, and Trump taking a stronger line might encourage them to look for a solution. Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program In terms of market impact, however, from where we sit—watching big universal mutual fund and ETF flows—geopolitics has really not been a meaningful long-term driver of flows for quite some time. It will sometimes move the needle week to week, but partly because of the enormous post-Great Financial Crisis liquidity, investors have become conditioned to see geopolitical events as providing a short dip that they should buy into. So, I am not going to predict any enormous shifts, even if we get the best-case scenario next week. So, what is going to drive the movement of flows? Amidst all the tariff negotiations, are you already seeing money move out of the US, and is that money being deployed into other emerging markets? Or do you think people are still in just a wait-and-watch mode? Cameron Brandt: More wait-and-watch than redeploy. We are seeing a little bit of money move out of the US, and we are certainly seeing fund managers who have the option of reducing their exposure to the US—by this I mean global equity funds with a truly global mandate—they have certainly been trimming their exposure, but without a full-on rush to the exits. We are not seeing significant outflows from US funds. It has been more of a slow grind— a few billion here, a few billion there—and people are certainly on edge. But the moment there was some clarity on tariffs with the two key trading partners, the EU and Japan, there was definitely a pickup in flows back into dedicated US equity funds. I do think the tariff uncertainty is not helping, but as you mentioned before I joined you, US markets continue to move higher and the general market sentiment is that this too shall pass. Live Events Also, help us understand a little more about these fund flows we have seen. While you say that flows out of the US have not been very significant, flows into the US are also not looking very attractive right now. But you have seen significant outflows from China, Taiwan, and other markets. Help us understand where these fund flows are actually going and where India stands amid all of this, because we have also seen consistent FII selling in India. Cameron Brandt: To answer the first question: recently, funds have been moving into liquidity funds. Last week, US and Europe money market funds absorbed about a hundred billion dollars, so I think that at the moment is the main offramp for the money. Regarding US flows, four, five, six billion dollars represent only 0.01% of the total AUM of the US equity funds we track, so we are seeing a trend away from US assets, but it is not a very strong one—certainly not yet. In terms of emerging markets, no, we are not seeing much of a rotation toward them. There was a little thaw coming into the third quarter, and there has been more interest on the emerging market debt side than on emerging markets equity. Flows into dedicated India funds were recovering until the latest inflection point caused by higher tariffs due to India's consumption of Russian oil. What is worrying people more, in many ways, are the pharmaceutical tariffs. India is a major provider of affordable pharmaceuticals to the US, and people are trying to make sense of what that might mean both for India and for US healthcare policy. So, there is more uncertainty to navigate, but once that uncertainty goes away, I think you will see more money come back into the US, and India—which was doing quite well until this happened—will probably start to see things pick up as well.
Bloomberg
4 days ago
- Business
- Bloomberg
BofA's Hartnett Says US Stocks Hit by Outflows as Rally Stalls
Investors are pulling money from US equities and flocking into cash funds, Bank of America Corp.'s Michael Hartnett said, amid renewed concerns that sweeping tariffs are crimping economic growth. Nearly $28 billion was redeemed from US stocks in the week through Aug. 6, while money market funds attracted about $107 billion, the biggest inflows since January, according to a note from the bank citing EPFR Global data.
Business Times
27-07-2025
- Business
- Business Times
Rising fiscal deficits drive billions into credit
[NEW YORK] Investors are showing signs of pulling money out of government bonds and ploughing it into US and European company debt. If the moves persist, money managers could be shifting what for decades has been market orthodoxy: that nothing is safer than buying US government debt. But as US fiscal deficits climb, hurt by tax cuts and rising interest costs, the government may look to borrow more, and company debt may be the safer option. In June, money managers pulled US$3.9 billion from Treasuries, while adding US$10 billion to European and US investment-grade corporate debt, according to EPFR Global data. In July, investors have added another US$13 billion to US high-grade corporates, the largest net client purchasing in data going back to 2015, according to a separate note from strategists at Barclays on Friday (Jul 25). Michaël Nizard, a portfolio manager at Edmond de Rothschild Asset Management, started making the switch from government into corporate debt at the end of last year and is holding on to the position. And in a note in the latest week, BlackRock strategists wrote, 'Credit has become a clear choice for quality.' To the extent this shift is happening, it's a slow change. The US doesn't have foreign currency debt, and can print more US dollars as it needs to. When money managers were alarmed about tariff wars in April, US Treasuries still performed better than corporate bonds, even if prices for both sectors broadly fell. And foreign demand for Treasuries has remained resilient, with holdings climbing in May. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up But tightening corporate bond spreads in recent months may be a function of government debt looking relatively weaker now. The US government lost its last triple A grade in May, when Moody's Ratings cut it to Aa1. The bond rater pointed to factors including the widening deficit and the rising burden of interest, noting that payments will likely absorb around 30 per cent of revenue by 2035, compared with 18 per cent in 2024 and 9 per cent in 2021. And US President Donald Trump's sweeping tax cut bill could add about US$3.4 trillion to US deficits over the next decade, according to projections from the nonpartisan Congressional Budget Office. At the same time, corporate profits remain relatively strong, and although there are some early reasons for caution, high-grade companies are generally generating enough earnings to easily pay their interest now. More US companies are topping earnings estimates this reporting season than the same period last year. Valuations for company debt have been high recently, reflecting investor demand for the debt. High-grade US corporate spreads have averaged below 0.8 percentage point, or 80 basis points, in July through Thursday. That's far below the mean for the decade of about 120 basis points, according to Bloomberg index data. Spreads for euro-denominated high-grade corporates have averaged about 85 basis points in July, compared with about 123 basis points for the decade. To some money managers, high valuations for corporate credit are cause to be wary. Gershon Distenfeld, a fund manager at AllianceBernstein Holding, pared back a position that favoured credit risk to rates risk earlier this month. Dominique Braeuninger, a multi-asset fund manager at Schroders Investment Management, agrees that corporate bond spreads are too tight to make them attractive. And even if BlackRock is generally positive on corporate debt, it is underweight long-term high-grade notes because spreads are tight, while being overweight short-term credit. But to many market observers, the world appears to be shifting, and it makes sense to hold more corporate debt now. 'What we've seen on the government fiscal side is not great news,' said Jason Simpson, a senior fixed income SPDR ETF strategist at State Street Investment Management. 'Corporates seem to be chugging along nicely.' BLOOMBERG
Bloomberg
21-07-2025
- Business
- Bloomberg
Europe-Based High Yield Funds See Most Weekly Inflows This Year
Junk bond funds based in Europe saw their biggest weekly inflow of the year last week, as investors continue to pile into an asset class that offers relatively generous yields, stability and diversification away from the US dollar. Over $1,233 million poured into European domiciled high yield funds with a local focus in the week ending July 16, according to BofA Global Research analysts, citing EPFR Global data. The previous week saw over $1 billion of inflows.
