Funds
Bond embrace may help emerging markets withstand Covid-19
Annual growth rate of debt issued by non-bank borrowers averages 11%
Funds piled into WTI futures in wild week for crude
Funds long 325 million barrels on April 21
Fed dominated MMF repo trades in March
FICC and BNP Paribas among other top repo counterparties
Investors abandoned junk bond ETFs in March
Forced sale of ‘fallen angels’ could exacerbate outflows at end-April
Hedge funds cut short US Treasury futures exposure – CFTC data
Short open interest held by leveraged participants down 23% from 12-month peak
Eurozone real estate funds build equity holdings
Net purchases of equity hit €18.2 billion
Equity gains bolster EU hedge funds’ portfolios
Funds were net sellers of equities, but market gains added +10% to balance sheet values
EU funds loaded up on US debt in 2019
Net purchases of US debt up +962% in 2019
‘Fallen angels’ pose little threat to EU funds
Passive fund outflows in a credit crisis would put pressure on high-yield bond prices
UK firms lead in cross-border loans to shadow banks
Entities based in the UK had 20% of outstanding global loans to non-banks
Cross-border loans to shadow banks top $7trn
Overseas lending to non-bank financial institutions expands 17% in Q3
Credit assets of non-banks top $44trn
Hedge funds increase loan and bond holdings the most of shadow-banking entities
Growth of shadow banks slowed in 2018 – FSB
Funds susceptible to run risk make up 72% of narrowly-defined non-bank universe
Hedge funds levered up in 2018
Relative value funds have highest adjusted leverage, at 7,155%
Liquidity risks acute for popular retail funds – Esma
Eight per cent of real estate fund NAV may be withdrawn over a one-day period
EU funds buy €89bn of overseas debt in Q3
Net purchases year-to-date almost three times total transactions in 2018
Fed underscores run risk of corporate bond funds
Total AUM of junk bond and bank loan funds was around $350 billion in Q2 2019
Lending to shadow banks accelerates – BIS
Annualised growth rate of loans to non-bank financial institutions hits 13%
MMF repo volumes fell 8% in September
FICC remained largest single counterparty for US Treasury repo
Non-banks’ role in cross-border funding grows
Non-bank financial institutions account for about one-fifth of cross-border dollar and sterling funding
EU alternative funds hold €17bn of CLOs
Over 50% of AIF exposures concentrated in top 20 funds
Currency risk drives EU equity fund derivatives use
Just 27.6% of Ucits equity funds traded derivatives in Esma sample
EU high-yield funds at risk of liquidity shock – Esma
High-yield bond funds have just 13% of NAV in high-quality liquid assets on average
FICC dominates US Treasury repo in Q2
Clearing house’s sponsored programme claimed $449.7 billion of US Treasury-backed trades