Emerging market bond funds suffered disproportionately in past month

Stock Market
© Reuters. People stand next an electronic display at B3 Brazilian Stock Exchange after an automatic circuit breaker was triggered this morning, in Sao Paulo © Reuters. People stand next an electronic display at B3 Brazilian Stock Exchange after an automatic circuit breaker was triggered this morning, in Sao Paulo

(Reuters) – Emerging market bond funds are performing poorly compared with their global peers as investors rush into the safety of cash and money markets to shield themselves from a further market erosion due to the cornavirus pandemic.

Refinitiv data showed emerging market bond funds have lost 16.7% of their market value on average over the past month, while the European and U.S. bond funds shed about 9% each.

(Graphic: Global bond funds’ returns, https://fingfx.thomsonreuters.com/gfx/mkt/13/3830/3791/region.jpg)

Global investors sold $ 4.5 billion worth of emerging market bond funds in the week ended March 18, compared with an inflow of $ 210 million in the prior week, according to recent data from Lipper.

(Graphic: EM flows, https://fingfx.thomsonreuters.com/gfx/mkt/13/3831/3792/weekly%20flows%20into%20EM%20bond%20funds.jpg)

Brazil’s bond funds were among the top 5 worst performing global funds over the past month, the data showed.

(Graphic: Worst performers, https://fingfx.thomsonreuters.com/gfx/mkt/13/3833/3794/worst%20performing.jpg)

Brazil’s Caixa FMP FGTS Carteira Livre Renda Fixa 49 , Santander (MC:) PB Negroocho Acoes FI and VIC Safari FICFI Multimercado Credito Privado IE have shed more than 40% each over the past month, the data showed.

Among the top global bond funds by asset size, PIMCO Income fund lost 12.78% over the past month, while Dodge & Cox Income fund dropped 7.26%.

(Graphic: Worst performers among top funds by assets, https://fingfx.thomsonreuters.com/gfx/mkt/13/3834/3795/top%20funds.jpg)

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