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FUND FLOWS: Europe Equities See Biggest Inflow Since Last Year as U.K. Takes Key Brexit Step

Flows into Germany and Italy Equity Funds hit 66- and 72-week highs respectively in late March and U.K. Bond Funds recorded their biggest inflow year-to-date.

The fourth week of March saw the U.K. formally trigger the two-year process outlined in the Treaty of the European Union’s Article 50 for leaving the EU. It also saw EPFR Global-tracked Europe Equity Funds record their biggest weekly inflow since early February 2016, and Japan Equity Funds finish the first quarter at the gallop with another inflow in excess of $2 billion as investors digested French polling data and the failure of the new U.S. administration to advance its plans for reforming the country’s health care sector.

Investors retained their appetite for diversified exposure to the equity and debt of developing nations, with Emerging Markets Equity and Bond Funds recording combined inflows of nearly $4 billion despite ebbing enthusiasm for Russia’s economic story and continued doubts about China’s seemingly solid, steady growth.

Overall, EPFR Global-tracked Bond Funds absorbed over $9 billion and Equity Funds a net $6.5 billion during the week ending March 29 while $9.5 billion flowed out of Money Market Funds. With the quarter entering its final days, U.S. Bond Funds have seen the biggest inflows in cash terms so far this year while Brazil Equity Funds are the leaders among the larger fund groups in flows as a percentage of AUM terms.

At the single country and asset class levels, flows into Germany and Italy Equity Funds hit 66- and 72-week highs respectively in late March and U.K. Bond Funds recorded their biggest inflow year-to-date. Among the Emerging Markets Country Fund groups Malaysia Equity Funds took in fresh money for the 12th week running and India Equity Funds extended their longest inflow streak since mid-3Q16. Convertible Bond Funds, which recorded their biggest inflow since 4Q15 the previous week, saw flows turn negative again.

 

Cameron Brandt is Director of Research for EPFR Global, an Informa Financial Intelligence company.

 

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