- US funds saw a $64 billion inflow after the Federal Reserve's rate hike, a three-month high
- Global emerging-market funds recorded a $877 million outflow, their first in 10 weeks
- Global high-yield bond funds faced a $2 billion outflow, the largest in six months
US funds recorded a sharp rebound in inflows following the Federal Reserve's rate hike, while emerging-market and global high-yield funds faced renewed redemptions, according to Elara Capital. US funds saw inflows of $64 billion during the week, marking a three-month high. In contrast, global emerging-market (GEM) funds recorded their first outflow in 10 weeks, with redemptions of $877 million.
Elara said the divergence points to a possible relative reallocation towards US equities following the Fed's 25-basis-point rate hike. The brokerage noted that the rate increase came alongside a resilient growth backdrop rather than signalling economic weakness. Most of the inflows into US funds were directed towards domestic ETFs.
High-Yield Funds See Largest Outflow In Six Months
Global high-yield bond funds recorded their largest outflow in six months at $2 billion during the week, coinciding with the Fed rate hike and a renewed rise in US Treasury yields.
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Elara noted that the latest redemption remains modest compared with the much larger outflow cycle between October 2021 and October 2023, when US Treasury yields embarked on a sustained multi-year rise. The brokerage said the intervening outflow episodes in February-April 2026 and March-April 2025 were largely event-driven and linked to geopolitical and tariff-related shocks.
“The current setup is therefore worth watching as a potential transition from event-driven to rates-driven pressure,” Elara said.
The US 10-year Treasury yield has returned to around 5% and briefly breached the 5% mark during the week, reaching its highest level since 2007, according to the brokerage.
With the Fed now also tightening while inflation remains elevated, Elara said a sustained break above the 5% yield zone could put further pressure on high-yield valuations and potentially accelerate redemptions.
South Korea Sees Large Outflow; Taiwan Inflows Moderate
South Korea-focused dedicated funds recorded a 22-week high outflow of $2.5 billion, with the flow trend deteriorating after remaining relatively strong for an extended period. Taiwan-focused funds, meanwhile, attracted $1.7 billion of inflows. However, Elara said the underlying flow trend is also showing early signs of moderation.
India-focused funds saw outflows accelerate to a seven-week high of $496 million. Elara said the flows could reflect additional pressure from the recent rise in crude oil prices. Selling in India-focused funds was evenly split between long-only funds and ETFs, with outflows of $251 million and $245 million, respectively.
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Global Consumer Goods funds attracted $1.37 billion during the week, their largest inflow since April 2023, following a prolonged period of outflows since July 2023.
Global Industrial funds also recorded strong demand, attracting $1.2 billion of inflows, the highest in six weeks.
Elara noted that the Global Industrial index has moved marginally below its 200-day moving average for the first time since March 2025, making the technical setup an important factor to watch.
Gold continued to attract strong investor interest, recording its 11th consecutive week of inflows.
Gold funds saw an addition of $3.4 billion during the week, highlighting sustained demand for the precious metal even as flows across equities and credit markets diverged following the Fed's rate decision.
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