Follow The Flow: Yielding support

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Follow The Flow: Yielding support

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Follow The Flow

Yielding support

Inflows continue to dominate in government bond funds 12 June 2026

Amid multi-year highs in ‘risk-free’ yields, inflows into government bond funds continue Credit Strategy

to surpass those into credit. However, we see a strengthening of our thesis that quality Europe

yield should continue to drive inflows into credit, particularly in a low rates volatility Ioannis Angelakis

environment, incentivising investors to own high-quality beta. Fixed-maturity funds Credit Derivatives Strategist

(FMFs) have been a pivotal technical tailwind for these inflows, especially as risk assets MLI+44 (UK)20 7996 0059

have continued to perform despite higher yields. We expect the bid for credit to persist ioannis.angelakis@bofa.com

for as long as rates volatility remains well below the 90–100bps level (SMOVEU3M Barnaby Martin

index; see the reports: Go with the flow in 2026 and Defending the front-end). CreditMLI (UK)Strategist

+44 20 7995 0458

Over the past week… barnaby.martin@bofa.com

High grade funds continue to register inflows, now for seven weeks running. Net MohitCredit StrategistAgarwalla

inflows were strongest in long-term funds this week, with short and mid-term funds also MLI (UK)

mohit.agarwalla@bofa.com

recording inflows. All maturity buckets have seen inflows for five consecutive weeks

now. High grade ETFs continued to registered inflows, ten weeks in a row.

High yield funds recorded their first weekly outflow, following eight weeks of inflows in

a row. Among European-domiciled funds, all different geographical focus pockets saw

outflows last week, led by Global-focussed HY funds. HY ETFs saw outflows this week Table 1: Weekly and YTD European

breaking five straight weeks of inflows.