Credit Analysis Summer bummer for bonds

Situation Room Summer bummer for bonds

Summer bummer for bonds 30 July 2026

Inflows to HG were weaker, while loans reported outflows this past week ending July Credit Strategy 29th. United States Cross Product Inflows slowed again for US HG bond funds and ETFs, with a +$3.73bn inflow down Yuri Seliger from a +$5.12bn inflow in the prior week. That was primarily driven by slower inflows to Credit Strategist HG Funds (to +$0.19bn from +$1.23bn) than by HG ETFs (to +$3.54bn from +$3.89bn). BofAS Inflows accelerated for short-term HG (to +$2.04bn from +$1.49bn), while inflows moderated ex. short-term (to +$1.69bn from +$3.63bn). Sohyun Marie Lee Credit Strategist Into stocks, out of loans BofAS Flows turned positive for equities this past week (to +$31.20bn from -$7.75bn), while

HY remained lackluster (to -$0.12bn, the biggest outflow in 10 weeks, from +$0.05bn). Loans reported outflows (to -$0.23bn, the biggest outflow in 4 months, from -$0.02bn), In this report and flows turned negative for global EM bonds (to -$0.13bn, the biggest outflow in 7 weeks, from +$0.60bn). On the other hand, inflows accelerated for munis (to +$2.05bn Daily supply snapshot from +$0.26bn). Finally, money markets reported a +$0.92bn inflow this past week, following a -$16.06bn outflow a week earlier. Daily dealer inventories update

Exhibit 1: Weekly high grade fund flows since 08/2025, $bn Daily foreign demand tracker HG ETF inflow was +$3.54bn this past week ending Jul-29 (vs +$3.89bn a week prior), and HG Funds inflow was +$0.19bn (vs +$1.23bn a week prior). Since 08/2025, both HG Funds and ETFs, and the 12-week moving average have dipped at the end of 2024 and April 2025. Flows have rebounded since then. Link to notable research 16 11 HG Funds HG ETF 12-week MA (RHS) 10 Japan Rates and FX Watch: Quick 9 take: Yen-buying intervention?

Weekly net fund flows ($bn) 12 8 7 Implications for BOJ and USD/JPY

Source: EPFR Global. Note: data are for US-domiciled funds only. BofA GLOBAL RESEARCH

BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 12 to 14.

Exhibit 2: Weekly equity fund flows since 08/2025, $bn Equities inflow was +$31.20bn this past week ending Jul-29 (vs -$7.75bn a week prior). Since Aug 2025, the weekly equity flows and its 12-week moving average accelerated into Dec 2024 and has declined since then.

140 Equities 12-week MA (RHS) 30 120

Source: EPFR Global. Note: data are for US-domiciled funds only. BofA GLOBAL RESEARCH

Exhibit 3: YTD fund flows summary by asset class Exhibit 4: Year to date fund flows, % of AUM As of Jul-29, YtD flows are 7% of AUM for HG, 1% for HY, 4% for loans, All fixed income has had the biggest inflows so far in 2026 as of Jul-29 at and 1% for equities. (6.8% of AUM), followed by High grade: ex ST (6.7%). Last week (% of AUM for YTD (% AUM) weekly YTD (% of All fixed income 6.8% reporting AUM for all High grade: ex ST 6.7% Asset class funds/ETFs) funds/ETFs) YTD ($bn) High grade: total 0.13% 6.7% 339.6 High grade: total 6.7% High grade: ex short-term 0.08% 6.7% 284.9 Munis 6.4% High yield: total -0.04% 1.2% 5.5 High yield: ETFs only 6.1% High yield: ETFs only 0.02% 6.1% 7.2 Loans 4.4% Loans 0.48% 4.4% 7.9 EM -0.03% 1.7% 14.9 EM 1.7% Munis 0.29% 6.4% 70.3 High yield: total 1.2% All fixed income 0.14% 6.8% 561.8 Equities 1.2% Money markets 0.01% 1.0% 85.2 Money markets 1.0% Equities 0.17% 1.2% 340.1 Note: Last week flow as % of AUM is based on AUM for weekly reporting funds / ETFs only. YTD 0% 5% 10% flow as % of AUM is based on AUM for the full fund/ ETF universe as of December 31 2020. Global EM funds, US-domiciled funds only for other fund types. Loan results only include Open-End funds Note: Global EM funds, US-domiciled funds only for other fund types. and ETFs which primarily hold Broadly Syndicated Loans and do not include CLO ETFs. Source: EPFR Global, BofA Global Research Source: EPFR Global, BofA Global…