GEMs Flow Talk: Expect more crossover US pension fund demand; EM CDX positioning is less short

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GEMs Flow Talk: Expect more crossover US pension fund demand; EM CDX positioning is less short

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GEMs Flow Talk

Expect more crossover US pension fund

demand; EM CDX positioning is less short

Steady inflows into EM. Same for US IG, but US HY lacking with no net flows this week. 28 May 2026

EPFR flows (% of AUM) GEM Fixed Income Strategy

All ex CN EXD LDM ex CN Blend EM Eqty US HY US IG ETF EXD ETF LDM Global

1w 0.2% 0.2% 0.1% 0.1% -0.2% 0.0% 0.2% 0.2% 0.4%

YTD 4.1% 1.8% 7.1% 8.4% 4.3% -0.5% 5.5% -0.2% 15.3%

2025 3.5% 1.3% 8.8% 4.3% 3.5% 6.3% 6.5% 6.7% 26.3%

2024 -8.0% -6.5% -10.9% -8.9% -0.1% 9.0% 11.2% -4.7% -16.3% Jane Brauer

Sovereign Debt FI Strategist

Trend 1↗ 1↗ 6↗ 8↗ 1↘ -- 4↗ 3↗ 1↗ BofAS

Source: BofA Global Research, EPFR, Inc. Note: Trend is # of consecutive wks up or down – shown 1w, YTD, FY 2025 & FY 2024 jane.brauer@bofa.com

BofA GLOBAL RESEARCH Lucas Martin, CFA

Marketing? See Debt Facts p2 with market positive stats not just negative ones. SovereignBofAS Debt FI Strategist

Expect even more crossover demand from US pension funds, despite historically

tight spreads. Our rates colleagues forecast pension fund rebalancing at month end will LDM debt funds ex China weekly flows

drive another $12bn into Corporates and $9bn into US Tsy, mainly due to approx +4% LDM flows up +0.1% of AUM (May ‘24-

outperformance of US equities and pushed by structural demand for duration from May ‘26)

private pension funds, with funded ratios over > 100%. That is against a forecast of lower

2.0

US IG supply. See Private pension fund rebalancing & US IG 2H26 Supply reports. Exhibit % 1.5

47 shows relentless demand for US IG corps since 2020 and even more since mid 2025. 1.0

EM CDX net positioning less short: Reported Tuesday night @ -$1.9bn net short, is 0.5