Follow The Flow: “Searching for shelter”

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Follow The Flow: “Searching for shelter”

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Follow The Flow

“Searching for shelter”

Government bond funds lead the way 24 July 2026

The return of geopolitical conflict and rising energy prices poses headwinds for risk Credit Strategy

assets. High-grade funds suffered outflows last week, the first in nearly three months. Europe

On the other hand, government bond funds continue to see a stronger inflow trend, as Ioannis Angelakis

"risk-free" yields remain very attractive. Higher all-in yields have provided a backstop for Credit Derivatives Strategist

fixed income markets, especially against a backdrop of compressed rate volatility. MLI+44 (UK)20 7996 0059

ioannis.angelakis@bofa.com

Over the past week… Barnaby Martin

Snapping a twelve-week run of inflows, high grade funds suffered from marginal Credit Strategist

MLI (UK)

outflows. However, short- and mid-term funds continued to record inflows for four and +44 20 7995 0458

fifteen weeks, respectively, showcasing the demand for low duration exposures. Note barnaby.martin@bofa.com

that long-term funds suffered from a fifth outflow in the last six weeks. Note that ETFs Mohit Agarwalla

Credit Strategist

also saw marginal inflows, marking sixteen weeks of inflows in a row. MLI (UK)

mohit.agarwalla@bofa.com

High yield funds recorded inflows over the previous week, their fifth week of inflows in

six weeks. Across European-domiciled HY funds, Global-focussed HY funds saw stronger

inflows than peers last week, with Euro-focussed HY funds also attracting inflows. US-

focussed HY funds saw outflows. HY ETFs recorded marginal inflows over the previous

week. Table 1:Weekly and YTD European

retail flows

Exhibit 1: Government bond funds continue to lead Weekly fund flows data across assets

Cumulative inflows, % of AUM