The dizzying escalation of the debt market, with returns at highest levels in at least a decade, is being the fishing ground par excellence for national investors. Total, monetary investment funds -those who invest in short-term debt, such as Treasury Bills from different countries- and fixed income bonds – public bonds or private company bonds – accumulate 19,343 million euros of net subscriptions (once money outflows have been subtracted) until September in a clear tendency of participants to seek profitability where it did not exist before. And not only that.
The movements that indicate a clear portfolio rotation, from stock markets to fixed income, continue to hold. With data prepared by Bank of America, public debt funds experienced new inflows of money and there have been 31 consecutive weeks in which this has occurred worldwide. And, meanwhile, money continues to flow out of equity funds for the twenty-ninth consecutive week. Where a certain change in trend is being seen is in monetary funds, those attached to shorter-term Letters, which for the first time in the last month suffered money outflows, anticipating the ceiling in interest rate increases both in USA as in the Eurozone.
With the data provided by Inverco (the employers’ association of Collective Investment Institutions in Spain), In September, fixed income funds were once again the most demanded by national investors, with net subscriptions worth 1,098 million euros. In the year the accumulated amount already reaches 16,399 million euros. In the case of monetary funds, the inflows of new money, once the outflows have been deducted, exceed 2,944 million. The other category that stands out from the rest is the target return funds, with almost 6,600 million and the guaranteed ones (which ensure a fixed return to their investors) worth 1,827 million euros.
These four categories are responsible for investment funds in Spain accumulating 35 consecutive months of positive net subscriptions, with 16.5 billion, practically double when compared to the photo twelve months ago.
The unprecedented increase undertaken by the European Central Bank (ECB) in the reference rates in the euro zone since July of last year, taking the official rate to levels of 4.5%, highs in 2001 and the deposit rate to levels historical figures, at 4%, continues to redirect Spaniards’ money to the most conservative products compared to investment in the stock market. Yesterday the Public Treasury placed 4,572 million euros in the first auction that took place after the last rate increase in September. In it, twelve-month bills, the most popular, reached a profitability of 3.9%, levels not seen in the last eleven years, since July 2012.