Investors shift away from hard currency bond funds in favor of local currency ones: EPFR Global

By Rebecca Melvin

New York, Feb. 9 – Emerging markets bond funds saw an aggressive shift away from funds with hard currency mandates, which recorded their biggest weekly outflow since the fourth quarter of 2016, to local currency EM funds, which posted their sixth consecutive inflow, according to data tracker EPFR Global.

Flows also shifted in the direction of higher quality and shorter duration debt for the week ended Feb. 7, according to EPFR Global on Friday.

Investors looking for corporate exposure again favored Latin America EM corporate funds, which chalked up their biggest inflow since late October. Investors with a U.S. focus also moved down the yield curve, especially when it came to corporate debt.

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