Global debt flows. Duration/risk asset flight to front end bonds. Six things learnt from latest flows data. Economic & Financial Analysis

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1 Economic & Financial Analysis Global Debt & Rates 23 November 218 Rates and Credit Note: The weekly data in this report reference the week ended Wednesday 21 nd Nov 218 Global debt flows Duration/risk asset flight to front end bonds Core markets are re-setting duration shorts on a significant flight into front end government bonds, but this also reflects flight from risk assets. The remarkable liquidation in inflation funds continues, pulling nominal rates off their highs. High yield is on an end-of-cycle-type alert mode on default elevation risks, while long end corporates are seeing ongoing outflows. Emerging markets continue to struggle flow-wise, but are eyeing a topping out in rates and the dollar in 219. Graph of the week: Pronounced inflow to front end government bonds and an outflow from long end corporates Government Corporate Multi-Product Short end Belly Long end Total Six things learnt from latest flows data 1. The implied preference from core flows is to favour elevated front end government bond exposure, overlayed with a barbell structure in government space, and a liquidation of long end risk in corporates (in past quarter). 2. Inflation linked funds remain friendless, indicative of a net re-pricing down in inflation breakevens, contrasting with a net re-pricing up in real rates, leaving nominal rates at a cross-over point, with no clear impulse. 3. It s not been a pretty year for emerging markets, but it s not been all about flows. Rather flows have been symptomatic of a combination of some isolated idiosyncratic risks plus a wider firm dollar/higher core rates environment. 4. Things have stabilised somewhat of late, with allocations to the likes of Turkey now off the lows (although the lows were the lowest ever) and the markets are eyeing a likely topping in the US rates and the dollar in 219. Padhraic Garvey, CFA Global Head of Debt and Rates Strategy London padhraic.garvey@ing.com View all our research on Bloomberg at ING<GO> 5. Global high yield returns are running negative, at -3.3% YTD (in USD), but this is better than seen in emerging markets for example (between -4% to -5% YTD), and even Treasuries are off by 3% YTD. 6. An issue looking into 219 is the risk for a rise in US delinquencies as the Fed finally tops out. Typically such a scenario correlates with higher default risk in high yield. This is a concern, but not an inevitable outcome at this juncture. 1

2 Contents Global Manager (average) Allocations by Region 3 Emerging markets 4 Emerging Markets Summary themes... 5 Emerging Markets Net Fund Flows... 6 Global EM Manager Asset Allocations... 7 Regional EM Manager Asset Allocation... 8 Selected EMEA and Latam Country Flows... 9 Selected Asia and ME/Africa Country Flows... 1 High Yield 11 High Yield Summary themes Developed Markets 14 Developed Markets Summary themes Global DM Manager Asset Allocations Developed Markets Country Flows

3 Global Manager (average) Allocations by Region Fig 1 Global allocations one month ago (%) Fig 2 EM allocations one month ago (%) Africa, Other,.8 Cash, 3.9 Middle East, 1.1 Asia Ex-Japan, 2.6 Emerging Europe, 2.3 Latin America, 4. North America, 41. Latin America, 35.3 Africa, 9.5 Emerging Europe, 2.9 Developed Asia, 8.5 Other, 1. Developed Europe, 35.2 Middle East, 8.7 Asia Ex-Japan, 2.7 Fig 3 EM detailed allocations one month ago (%) Fig 4 EMEA allocations one month ago (%) Korea (South),.6 Srilanka,.8UAE, 1.8 Cash, 2.6 Brazil, 7.5 Dom. Rep., 1.3 Panama,.8 Chile, 2.1 India, 1.8 Venezuela,.5 Ukraine, 1.6 Kazakhstan, 1.4 Philippines, 1.8 Romania, 1. Thailand, 1.9 Mexico, 8.1 Indonesia, 6.3 Azerbaijan, Czechrepublic, 2.3 Slovenia,.2.. Cash, 1.1 Serbia, 1.4 Lithuania,.5 Croatia, 3.1 Ukraine, 6.7 Kazakhstan, 5.8 Romania, 4.2 Turkey, 16.2 Russia, 19.1 China, 3.3 Peru, 2.7 Turkey, 3.9 Hungary, 2.3 Russia, 4.6 Malaysia, 2.3 Argentina, 3.5 Colombia, 4.2 Poland, 2.5 South Africa, 4.4 Hungary, 9.5 Poland, 1.5 South Africa, 18.3 Fig 5 Asia EM allocations one month ago (%) Fig 6 Latam allocations one month ago (%) Singapore, 2.5 Mongolia, Vietnam,.8.6Bangladesh,. Cash, 2. Pakistan, 2. Taiwan,. Hongkong, 2.6 Srilanka, 3.8 Korea (South), 2.7 India, 8.7 Indonesia, 3.7 Jamaica,.8 Ecuador, 2.6 Guatemala,.8.1. Cuba,. Elsalvador, 1.2 Cash, 2.4 Paraguay, 1. Uruguay, 2.6 Costarica, 1.8 Panama, 2.4 Venezuela, 1.4 Dom. Rep., 3.7 Chile, 6.1 Brazil, 21.7 Philippines, 8.8 Peru, 7.7 Mexico, 23.4 Thailand, 9.1 Malaysia, 11.4 Argentina, 1.2 China, 16.3 Colombia, 12.3 Fig 7 Developed allocations one month ago (%) Fig 8 Eurozone allocations one month ago (%) Newzealand,.3 Denmark,.3Norway,.4 Cash, 4.4 Switzerland, 1.3 Sweden,.9 Australia, 2.2 Canada, 3.8 Japan, 6.7 UK, 8.6 USA, 42.4 Finland,.9 Greece,.4. Slovakia,.1. Cash, 1.8 Portugal, Ireland, 3.6 France, 25.4 Austria, 1.3 Belgium, 4.3 Spain, 13.3 Netherlands, 8.1 Germany, 16.4 Euro, 24.9 Italy,

4 Emerging markets 4

5 Emerging Markets Summary themes Outflows have dominated in recent months. Most of these have been from blend funds and local currency funds; in the past quarter blend funds have shed 3.2% of assets under management (AUM) and local currency funds 1.2% of AUM, while the fall in hard currency funds AUM has been moderate, just.2% of AUM. The bulk of the downsizing has been from retail, and have been in-discriminate with respect to EM product. Overall retail has shed 4.6% of AUM in the past quarter, with hard, local and blend funds all down by at least a 4% handle. In contrast, professional accounts have been net buyers of emerging markets debt in the past quarter, especially in hard currency, with AUM there up 1.7%. There has also been some moderate inflows to local currency funds, with AUM there up.4%; not a big inflow, and at least not an outflow. Net net, despite moderate inflows in the past week, outflows have dominated in the past quarter(s). This plus negative returns has seen cumulative AUM under stress, as encapsulated in the graph below (blue line). Fig 9 Feature Chart: The light blue line shows flows including returns and has clearly been stressed lower in recent months 6, 4, 2, -2, -4, -6, -8, $ million $bn (cumulative AUM) EM Hard (all investors) EM Local (all investors) EM Blend (all investors) EM Total (all investors) It is clear from the allocations in recent months that the severe angst that had stricken the likes of Turkey and Argentina has eased, manifesting in increased allocations. Turkish allocations for GEM accounts hit an historical low in August, but have recovered since; still well below average though. Most emerging markets saw outflows in the past month, although Colombia and China managed some inflows. At the other end of the spectrum, Brazil, Thailand and Israel saw outflows in excess of the average in the past month. Beyond that, the regional spectrum was broadly balanced by global geography. BOTTOM LINE: It s not been a pretty year for emerging markets, with hard currency returns running at c.-5% and local currency at -4.4% (both in USD). It s not been all about flows. Rather flows have been symptomatic of a combination of some isolated idiosyncratic risks plus a bigger picture firm dollar/higher core rates environment. In fact outflows from emerging markets are running at a mere.4% in the past year; it s just that outflows have dominated on aggregate since 2Q. Things have stabilised somewhat of late, with allocations to the likes of Turkey now off the lows (although the lows were the lowest ever) and markets are eyeing a likely topping in US rates and the dollar in 219. A soft landing from the cumulative US rate hike process would help emerging markets re-engineer some inflows as a theme for

6 Emerging Markets Net Fund Flows Fig 1 Emerging Markets - Change in the past week (%) Fig 11 Emerging Markets - Change in past week (US$m) Total Professional Retail $ millions PAST WEEK Total Professional Retail EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM Fig 12 Emerging Markets - Change in the past month (%) Fig 13 Emerging Markets - Change in past month (US$m) % AUM PAST MONTH $ millions PAST MONTH Total Professional Retail -25 Total Professional Retail EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM Fig 14 Emerging Markets - Change in past quarter (%) Fig 15 EM - Change in past quarter (US$m) 3. 4 $ millions PAST QUARTER Total Professional Retail -8 Total Professional Retail EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM Fig 16 Emerging Markets - Change in the past year (%) Fig 17 Emerging Markets - Change in past year (US$m) 1 % AUM PAST YEAR 25 $ millions PAST YEAR Total Professional Retail -2 Total Professional Retail EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM EM Hard Currency Funds EM Local Currency Funds EM Blend Currency Funds Total EM 6

7 Global EM Manager Asset Allocations Fig 18 GEM allocations one month ago (%) Fig 19 GEM detailed allocations one month ago (%) Africa, 9.5 Korea (South),.6 Srilanka,.8UAE, 1.8 Cash, 2.6 Brazil, 7.5 Dom. Rep., 1.3 Panama,.8 Latin America, 35.3 Emerging Europe, 2.9 Chile, 2.1 India, 1.8 Venezuela,.5 Ukraine, 1.6 Kazakhstan, 1.4 Philippines, 1.8 Romania, 1. Thailand, 1.9 Mexico, 8.1 Indonesia, 6.3 Middle East, 8.7 Other, 1. Asia Ex-Japan, 2.7 China, 3.3 Peru, 2.7 Turkey, 3.9 Hungary, 2.3 Russia, 4.6 Malaysia, 2.3 Argentina, 3.5 Colombia, 4.2 Poland, 2.5 South Africa, 4.4 Fig 2 GEM allocations two months ago (%) Fig 21 GEM detailed allocations two months ago (%) Africa, 9.5 Korea (South),.6 Srilanka,.8UAE, 1.7 Cash, 2.6 Brazil, 7. Dom. Rep., 1.3 Panama,.8 Chile, 2.3 Venezuela,.4 Mexico, 8. Latin America, 34.9 Emerging Europe, 2.4 India, 1.8 Ukraine, 1.6 Kazakhstan, 1.3 Philippines, 1.8 Romania, 1. Thailand, 1.9 Indonesia, 6.3 Middle East, 8.5 Other, 1.6 Asia Ex-Japan, 21. China, 3.6 Peru, 2.9 Hungary, 2.2 Malaysia, 2.4 Argentina, 3.3 Poland, 2.8 Turkey, 3.3 Russia, 4.7 Colombia, 4.4 South Africa, 4.3 Fig 22 GEM allocations one quarter ago (%) Fig 23 GEM detailed allocations one quarter ago (%) Africa, 9.7 Korea (South),.5 Srilanka,.7UAE, 1.5 Cash, 2.6 Brazil, 7.1 Dom. Rep., 1.2 Panama,.8 Latin America, 34.7 Emerging Europe, 22.2 Chile, 2.3 Venezuela,.5 India, 1.7 Ukraine, 1.4 Kazakhstan, 1.3 Philippines, 1.4 Romania, 1. Thailand, 1.6 Mexico, 7.3 Indonesia, 6.1 Middle East, 8.1 Other, 1. Asia Ex-Japan, 19.8 China, 3.5 Peru, 2.9 Hungary, 2. Malaysia, 2.4 Argentina, 3.8 Poland, 2.9 Turkey, 4.9 Russia, 5.3 Colombia, 4.3 South Africa, 4.5 Fig 24 GEM allocations one year ago (%) Fig 25 GEM detailed allocations one year ago (%) Africa, 8.1 Korea (South),.5 Srilanka,.9 UAE, 1. Cash, 2.6 Dom. Rep., 1.2 Panama, 1. Brazil, 8.3 Latin America, 37. Emerging Europe, 24.2 Chile, 1.8 Venezuela, 1. India, 1.9 Ukraine, 2. Kazakhstan, 1.2 Philippines, 1.3 Romania, 1.3 Thailand, 1.6 Mexico, 7.6 Indonesia, 6.8 China, 2.9 Middle East, 5.9 Other,.8 Asia Ex-Japan, 2.3 Peru, 3.1 Hungary, 2.2 Malaysia, 2.6 Argentina, 4.6 Poland, 2.7 South Africa, 3.9 Russia, 5.7 Colombia, 3.9 Turkey, 5.6 7

8 Regional EM Manager Asset Allocation Fig 26 EMEA allocations one month ago (%) Fig 27 EMEA allocations two months ago (%) Azerbaijan, Czechrepublic, 2.3 Slovenia,.2.. Cash, 1.1 Serbia, 1.4 Lithuania,.5 Croatia, 3.1 Ukraine, 6.7 Turkey, 16.2 Azerbaijan, Czechrepublic, Cash, 1.2 Serbia, 1.9 Slovenia,.2 Lithuania,.5 Croatia, 3.3 Ukraine, 6.8 Turkey, 14.1 Kazakhstan, 5.8 Romania, 4.2 Russia, 19.1 Kazakhstan, 5.7 Romania, 4.2 Russia, 2. Hungary, 9.5 Hungary, 9.2 Poland, 1.5 South Africa, 18.3 Poland, 11.7 South Africa, 18.1 Fig 28 Asia allocations one month ago (%) Fig 29 Asia allocations two months ago (%) Korea (South),.6 Srilanka,.8UAE, 1.8 Cash, 2.6 Brazil, 7.5 Dom. Rep., 1.3 Panama,.8 Chile, 2.1 India, 1.8 Venezuela,.5 Ukraine, 1.6 Kazakhstan, 1.4 Philippines, 1.8 Romania, 1. Thailand, 1.9 China, 3.3 Peru, 2.7 Mexico, 8.1 Indonesia, 6.3 Turkey, 3.9 Hungary, 2.3 Russia, 4.6 Malaysia, 2.3 Argentina, 3.5 Colombia, 4.2 Poland, 2.5 South Africa, 4.4 Korea (South),.6 Srilanka,.8UAE, 1.7 Cash, 2.6 Brazil, 7. Dom. Rep., 1.3 Panama,.8 Chile, 2.3 India, 1.8 Venezuela,.4 Ukraine, 1.6 Kazakhstan, 1.3 Philippines, 1.8 Romania, 1. Thailand, 1.9 China, 3.6 Peru, 2.9 Hungary, 2.2 Malaysia, 2.4 Argentina, 3.3 Poland, 2.8 Mexico, 8. Indonesia, 6.3 Turkey, 3.3 Russia, 4.7 Colombia, 4.4 South Africa, 4.3 Fig 3 Latam allocations one month ago (%) Fig 31 Latam allocations two months ago (%) Jamaica,.8 Ecuador, 2.6 Guatemala,.8.1. Cuba,. Elsalvador, 1.2 Cash, 2.4 Paraguay, 1. Uruguay, 2.6 Costarica, 1.8 Panama, 2.4 Venezuela, 1.4 Dom. Rep., 3.7 Chile, 6.1 Brazil, 21.7 Jamaica,.8 Ecuador, 2.7 Guatemala,.8 Elsalvador, 1.3 Paraguay, 1. Uruguay, 2.9 Costarica, 2. Panama, 2.4 Venezuela, 1.2 Dom. Rep., 3.7 Chile, Cuba,. Cash, 3.3 Brazil, 2.4 Peru, 7.7 Mexico, 23.4 Peru, 8.3 Mexico, 23.3 Argentina, 1.2 Colombia, 12.3 Argentina, 9.5 Colombia, 12.7 Fig 32 Africa & ME allocations one month ago (%) Fig 33 Africa & ME allocations two months ago (%) Jordan, Rwanda,.6 Saudi 1.8 Arabia, 1.3. Jordan, Saudi 1.7 Arabia, 1.. UAE, 16. Rwanda,.6 UAE, 15.2 Oman, 1.3 Bahrain, Ethiopia,.8 Iraq, 1.8 Israel, 8.1 Oman, 9.5 Bahrain, Ethiopia,.7 Iraq, 2. Israel, 7.7 Namibia,.6 Ivorycoast, 5.1 Namibia,.6 Ivorycoast, 5. Tunisia, 1. Gabon,.7 Angola, 3.5 Egypt, 13.6 Kenya, 1.8 Lebanon, 4.3 Ghana, 4.6 Zambia, 1.5 Nigeria, 1. Tunisia,.9 Gabon,.6 Angola, 3.1 Egypt, 14.8 Kenya, 1.7 Lebanon, 4.6 Ghana, 4.8 Zambia, 1.3 Nigeria, 1.8 8

9 Selected EMEA and Latam Country Flows Fig 34 EMEA Change in the past week (%) Fig 35 EMEA Change in the past month (%) Total (Selected EMEA) Total (Selected EMEA) % AUM PAST MONTH Ukraine Ukraine Turkey Turkey S Africa S Africa Russia Russia Romania Romania Poland Poland Kazakhstan Kazakhstan Hungary Hungary Czech Czech Fig 36 EMEA Change in the past quarter (%) Fig 37 EMEA Change in the past year (%) Total (Selected EMEA) Total (Selected EMEA) % AUM PAST YEAR Ukraine Ukraine Turkey Turkey S Africa S Africa Russia Russia Romania Romania Poland Poland Kazakhstan Kazakhstan Hungary Hungary Czech Czech Fig 38 Latam Change in the past week (%) Fig 39 Latam Change in the past month (%) % AUM PAST MONTH Total (Selected Latam) Venezuela Peru Mexico Colombia Brazil Argentina Total (Selected Latam) Venezuela Peru Mexico Colombia Brazil Argentina Fig 4 Latam Change in the past quarter (%) Fig 41 Latam Change in the past year (%) Total (Selected Latam) Total (Selected Latam) % AUM PAST YEAR Venezuela Venezuela Peru Peru Mexico Mexico Colombia Colombia Brazil Brazil Argentina Argentina

10 Selected Asia and ME/Africa Country Flows Fig 42 Asia Change in the past week (%) Fig 43 Asia Change in the past month (%) % AUM PAST MONTH Total (Selected Asia EM) Total (Selected Asia EM) Vietnam Vietnam Thailand Thailand S Korea S Korea Philippines Philippines Pakistan Pakistan Mongolia Mongolia Malaysia Malaysia Indonesia Indonesia India India China China Fig 44 Asia Change in the past quarter (%) Fig 45 Asia Change in the past year (%) Total (Selected Asia EM) Total (Selected Asia EM) % AUM PAST YEAR Vietnam Vietnam Thailand Thailand S Korea S Korea Philippines Philippines Pakistan Pakistan Mongolia Mongolia Malaysia Malaysia Indonesia Indonesia India India China China Fig 46 Middle East & Africa In the past week (%) Fig 47 Middle East & Africa In the past month (%) Total (Selected Sub-Sahara) Nigeria Ivory Coast Total (Selected ME & NA) UEA Tunisia Qatar Lebanon Kuwait Jordan Israel Eqypt Bahrain Total (Selected Sub-Sahara) Nigeria Ivory Coast Total (Selected ME & NA) UEA Tunisia Qatar Lebanon Kuwait Jordan Israel Eqypt Bahrain % AUM PAST MONTH Fig 48 Middle East & Africa In the past quarter (%) Fig 49 Middle East & Africa In the past year (%) Total (Selected Sub-Sahara) Nigeria Ivory Coast Total (Selected ME & NA) UEA Tunisia Qatar Lebanon Kuwait Jordan Israel Eqypt Bahrain Total (Selected Sub-Sahara) Nigeria Ivory Coast Total (Selected ME & NA) UEA Tunisia Qatar Lebanon Kuwait Jordan Israel Eqypt Bahrain % AUM PAST YEAR

11 High Yield 11

12 High Yield Summary themes Outflows from high yield funds have re-accelerated in recent weeks, capping off a year of significant net outflows. Assets under management (AUM) in the past quarter are down 3.2%, of which half has occurred in the past month; and half of that has happened in the past week (outflow of.8% of AUM). The chart below highlights W European high yield. The blue bars illustrate the weekly flows, and illustrate a dominant outflow process. This has been the dominant driver underpinning the fall in cumulative AUM seen for 218 (orange line), as opposed to total returns which have not been outsized negative, far from it. Fig 5 Feature Chart: Orange line is AUM changes incl. returns. Blue bars are flows 1.5 $bn (weekly flow) W Europe High Yield (in $) $bn (cumulative AUM) EU High Yield Weekly Flow $bn (LHS) EU High Yield Cumulative AUM $bn (RHS) W Europe has seen higher relative outflows in the past month, but the US saw the more severe of the relative outflows in the past quarter (3.8% fall for US AUM versus a 2.% fall for W Europe AUM). The geographic distinction between the US and W European high yield has been more balanced in more recent weeks. BOTTOM LINE: Global high yield returns are running negative, at -3.3% YTD (in USD), but this is better than seen in emerging markets for example (between -4% to -5% YTD), and even Treasuries are off by 3% YTD. Negative total returns have accelerated in recent week though, having held up quite well through previous quarters. An issue looking into 219 is the risk for a rise in delinquencies generally across the US economy as the Fed finally tops out with rate hikes. Typically such a scenario correlates with higher default risk in high yield. This is a concern, partly centred on leverage, but not an inevitable outcome at this juncture. 12

13 Fig 51 Western Europe High Yield Weekly Flows $bn (weekly flow) W Europe High Yield (in $) $bn (cumulative AUM) EU High Yield Weekly Flow $bn (LHS) EU High Yield Cumulative AUM $bn (RHS) Fig 52 US High Yield Weekly Flows 6. $bn (weekly flow) USD High Yield $bn (cumulative AUM) US High Yield Weekly Flow $bn (LHS) US High Yield Cumulative AUM $bn (RHS) Fig 53 6, 4, 2, -2, -4, -6, -8, Emerging Markets Weekly Flows all currencies $ million $bn (cumulative AUM) EM Hard (all investors) EM Local (all investors) EM Blend (all investors) EM Total (all investors) 13

14 Developed Markets 14

15 Developed Markets Summary themes Quite a pronounced inflow to short end government funds has been thematic in recent months; in fact in the past quarter there has been a near 12% rise in AUM here. This contrasts with a 1% contraction in belly funds and a near 2% expansion in long end funds. In any case, this is a net reduction in duration on average. This theme has intensified in the past week, with a 3.4% rise in front end government AUM contrasting with a 1.1% contraction in long end AUM (while the belly has been broadly neutral). This renewed duration short preference has come in the wake of falls in global rates in the face of risk asset angst. Despite this duration short preference, inflation funds continue to haemorrhage. Which is quite remarkable, as typically at this stage of the US macro and rates cycle inflation linked funds would typically prove a decent hedge as late cycle correlates with an elevation in both actual inflation prints, and the risk for higher inflation. This implied benign inflation risk discount is in turn a factor that contains ambition for nominal rates to rise too much (interconnected of course). Fig Feature Chart: The market is re-setting duration shorts Government Corporate Multi-Product Short end Belly Long end Total Meanwhile, corporate funds continue to see outflows, and the trend in the past quarter has been for outflows to be concentrated in longer end funds. Specifically, AUM in long end corporate funds are down 4.4% in the past quarter, compared with a 2.9% fall in belly fund AUM and a.8% fall in front end corporate AUM. BOTTOM LINE: The implied preference derived from developed market flows is to favour maintaining corporate front end exposures alongside elevated front end government bond exposure, overlaid with a barbell structure in government space and a liquidation of long end risk in corporates (as a theme in the past quarter). And inflation linked funds remain friendless, indicative of a net re-pricing up in real rates a net re-pricing down in inflation breakevens, leaving nominal rates with no clear impulse. 15

16 Fig 55 Change in the past week (%) Fig 56 Change in the past week (%) Government Corporate Multi-Product -1. High Yield Inflation Money Markets Short end Belly Long end Total North America W Europe Total Fig 57 Change in the past month (%) Fig 58 Change in the past month (%) % AUM PAST MONTH Government Corporate Multi-Product % AUM PAST MONTH High Yield Inflation Money Markets Short end Belly Long end Total North America W Europe Total Fig 59 Change in the past quarter (%) Fig 6 Change in the past quarter (%) Government Corporate Multi-Product High Yield Inflation Money Markets Short end Belly Long end Total North America W Europe Total Fig 61 Change in the past year (%) Fig 62 Change in the past year (%) % AUM PAST YEAR Government Corporate Multi-Product % AUM PAST YEAR High Yield Inflation Money Markets Short end Belly Long end Total North America W Europe Total 16

17 Global DM Manager Asset Allocations Fig 63 Eurozone allocations one month ago (%) Fig 64 Global DM allocations one month ago (%) Finland,.9 Greece,.4. Slovakia,.1. Cash, 1.8 Portugal, Ireland, 3.6 France, 25.4 Austria, 1.3 Belgium, 4.3 Spain, 13.3 Newzealand,.3 Denmark,.3Norway,.4 Cash, 4.4 Switzerland, 1.3 Sweden,.9 Australia, 2.2 Canada, 3.8 Japan, 6.7 UK, 8.6 USA, 42.4 Netherlands, 8.1 Germany, 16.4 Italy, 18.9 Euro, 24.9 Fig 65 Eurozone allocations two months ago (%) Fig 66 Global DM allocations two months ago (%) Finland,.9Greece,.4. Slovakia,.1. Cash, Portugal, 1.7 France, 24.2 Ireland, 3.5 Austria, 1.4 Belgium, 4.3 Spain, 13.1 Newzealand,.3 Denmark,.3Norway,.4 Cash, 4.1 Switzerland, 1.3 Sweden,.9 Australia, 2.2 Canada, 3.8 Japan, 7.1 UK, 8.6 USA, 42.9 Netherlands, 8.5 Germany, 17.3 Italy, 18.7 Euro, 24.7 Fig 67 Eurozone allocations one quarter ago (%) Fig 68 Global DM allocations one quarter ago (%) Finland,.9 Greece,.4..7Slovakia,.1. Cash, 2.2 Portugal, 1.7 France, 23.2 Ireland, 3.5 Austria, 1.4 Belgium, 4.4 Spain, 13.1 Newzealand,.3 Denmark,.4Norway,.4 Cash, 4. Switzerland, 1.2 Sweden,.9 Australia, 2.1 Canada, 3.7 Japan, 7.3 UK, 8.8 USA, 41.9 Netherlands, 8.9 Germany, 16.9 Italy, 19.4 Euro, 25.2 Fig 69 Eurozone allocations one year ago (%) Fig 7 Global DM allocations one year ago (%) Finland,.9Greece,.4.. Slovakia,.1 Cash, 2.7 Portugal,.9.1 France, 23.4 Ireland, 3.1 Austria, 2.1 Belgium, 5.1 Spain, 9.7 Newzealand,.4 Denmark,.6 Norway,.3 Switzerland, 1.2 Sweden, 1. Australia, 2.9 Canada, 4.5 Japan, 8.2 UK, 1.5 Cash, 3. USA, 41.3 Netherlands, 1. Germany, 19.6 Italy, 16.9 Euro,

18 Developed Markets Country Flows Fig 71 Eurozone Change in the past week (%) Fig 72 Non Eurozone Change in the past week (%) Total (Selected Eurozone) Spain Slovenia Slovakia Portugal Netherlands Latvia Italy Ireland Greece Germany France Finland Cyprus Belgium Austria Total (Selected Non Eurozone) US Canada UK Switzerland Sweden Norway Denmark Iceland Singapore New Zealand Japan Hong Kong Australia Fig 73 Eurozone Change in the past month (%) Fig 74 Non Eurozone Change in the past month (%) Total (Selected Eurozone) Spain Slovenia Slovakia Portugal Netherlands Latvia Italy Ireland Greece Germany France Finland Cyprus Belgium Austria % AUM PAST MONTH Total (Selected Non Eurozone) US Canada UK Switzerland Sweden Norway Denmark Iceland Singapore New Zealand Japan Hong Kong Australia % AUM PAST MONTH Fig 75 Eurozone Change in the past quarter (%) Fig 76 Non Eurozone Change in the past quarter (%) Total (Selected Eurozone) Spain Slovenia Slovakia Portugal Netherlands Latvia Italy Ireland Greece Germany France Finland Cyprus Belgium Austria Total (Selected Non Eurozone) US Canada UK Switzerland Sweden Norway Denmark Iceland Singapore New Zealand Japan Hong Kong Australia Fig 77 Eurozone Change in the past year (%) Fig 78 Non Eurozone Change in the past year (%) Total (Selected Eurozone) Spain Slovenia Slovakia Portugal Netherlands Latvia Italy Ireland Greece Germany France Finland Cyprus Belgium Austria % AUM PAST YEAR Total (Selected Non Eurozone) US Canada UK Switzerland Sweden Norway Denmark Iceland Singapore New Zealand Japan Hong Kong Australia % AUM PAST YEAR

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