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FUND FLOWS: US Funds Benefit From New Doubts About Europe

Investors continue to pour money into emerging market equity funds: Flows climb to 25-week high

EPFR Global-tracked US Equity and Bond Funds took in a combined $14 billion during the second week of February as political trends in France and Holland and Greece’s long-running debt crisis sapped investor appetite for European assets. Redemptions from Europe Bond Funds hit an 11-week high, with Italy Bond Funds recording their biggest outflow in over seven months. Flows to Europe Equity Funds remained in the holding pattern they have been locked into since early 4Q16.

 

The week ending February 15 also saw flows into Emerging Markets Equity Funds climb to a 25-week high. Among the factors driving the latest influx of fresh money is improving sentiment towards the four BRICs markets – Brazil, Russia, India and China – with dedicated India Equity Funds posting their biggest weekly inflow since early 2Q15.

Overall, EPFR Global-tracked Equity Funds recorded a collective inflow of over $17 billion for the week while $6.7 billion flowed into Bond Funds and $11.2 billion out of Money Market Funds. Appetite for Dividend Equity Funds continue to build, with the latest week’s flows a 12-week high that extended their longest inflow streak since early October.

At the country level Russia Equity and Bond Funds extended their current inflow streaks and Poland Equity Funds absorbed fresh money for the eighth time in the past 10 weeks. Redemptions from France Equity and Japan Bond Funds climbed to nine and 29-week highs respectively.

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

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