“Searching for shelter”

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 MLI (UK) fixed income markets, especially against a backdrop of compressed rate volatility. 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 fifteen weeks, respectively, showcasing the demand for low duration exposures. Note

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) 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 1 6% This Wk YTD gov't funds IG funds Sector Week (%) YTD (%) 5% HY $249 0.1% ($1,077) (0.4%) HY (ETFs) $12 0.0% $3,057 6.7% 4% IG ($126) (0.0%) $36,668 1.7% in euros ($214) (0.0%) $13,214 1.2% 3% in sterling ($791) (0.3%) $1,402 0.5% in usd $611 0.2% $11,611 3.3% 2% IG (ETFs) $81 0.0% $14,771 5.9% Loan $321 1.7% $2,927 16.9% 1% Govies $2,382 0.3% $40,434 4.8% Fixed Income $3,618 0.1% $101,401 2.7% 0% MM ($17,103) (0.7%) $110,009 4.7%

-1% Equities ($1,557) (0.1%) ($15,548) (0.8%) Equities (ETFs) $963 0.2% $22,493 3.7% Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 Commodities $326 0.1% $7,620 2.7% Source: EPFR Global. European domiciled funds only Global EM debt $871 0.1% $29,036 4.1% BofA GLOBAL RESEARCH Source: EPFR Global. In $mn; week ending 22nd July. Data refers to European domiciled funds, except for Government bond funds registered inflows over the previous week, the fourth week of EM debt funds that refer to global. Some IG funds consecutive inflows. Money market funds posted outflows last week. Now in its sixth can also allocate to government bonds. Note that IG consecutive week, global EM debt funds registered inflows. Overall, fixed income funds are also split into other currencies away from Euro, USD and GBP. funds registered inflows, the sixteenth week of non-stop inflows. Breaking a two-week BofA GLOBAL RESEARCH inflows stretch, equity funds suffered from outflows again this week.

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Flow chartbook Weekly Flow Distributions per asset class Exhibit 2: Distribution of IG fund flows ($mn) over the past week Exhibit 3: Distribution of HY fund flows ($mn) over the past week The flow trend is dispersed across funds The flow trend is dispersed across funds

-500 > x -50 < x < 0 -500 < x < -250 -250 < x < -100 -100 < x < -50 x > 500 50 < x < 100 100 < x < 250 250 < x < 500 0 < x < 50 -100 > x -10 < x < 0 -100 < x < -50 -50 < x < -25 -25 < x < -10 x > 100 0 < x < 10 10 < x < 25 25 < x < 50 50 < x < 100

Source: EPFR Global. The height of each column represents the number of funds with weekly flow Source: EPFR Global. The height of each column represents the number of funds with weekly flow within a given bucket within a given bucket BofA GLOBAL RESEARCH BofA GLOBAL…