For the second week running, Financial Sector Funds received the biggest influx of fresh money among the 11 major EPFR Global-tracked Sector Fund groups as investors responded to a wave of buy-back announcements from major U.S. banks. Seven of the groups posted outflows for the week ending July 12 that ranged from less than $1 million for Infrastructure Sector Funds to $558 million for Consumer Goods Sector Funds.
With the second quarter’s corporate earnings season about to kick off in the U.S., flows to Consumer Goods Sector Funds extended their recent slump and Industrial Sector Funds posted their first outflow of the current quarter. Funds with U.S. mandates experienced the bulk of the latest redemptions as the new administration's lack of progress on key policy goals, higher consumer credit costs and falling car sales took their toll on investor sentiment.
Real Estate Sector Funds also experienced outflows, their 12th in the past 13 weeks, in the face of headwinds ranging from the US Federal Reserve's desire to cut the amount of mortgage-backed securities on its balance sheet to concerns about overheating in parts of the Canadian and Chinese real estate markets.
Energy Sector Fund flows, which have held up for much of the year-to-date in anticipation of further efforts by OPEC to support oil prices and a rebound in the sector's profitability, were negative for the second straight week. But Alternative Energy Funds extended their longest inflow streak in over a year.