Equity funds suffer as macro concerns return, says EPFR Global
Concerns over the health of Europe’s economy and recent comments by the US Federal Reserve led to investors channelling their cash towards less risky funds last week.
Fund flow data provider EPFR Global says collective outflows of $2 billion (£1.3 billion) were seen across the equity funds it tracks during the week to April 4. Bond funds witnessed net inflows of $4.7 billion, with more than 55% of this going to US-focused portfolios.
Last week saw the Federal Reserve publish the minutes of its most recent monetary policy meeting. These showed few members were in favour of continued policy easing, while one argued that maintaining the current easy policy past the end of 2012 could be “inappropriate”.
Over in Europe, the yields on Spanish debt continued to rise despite the government unveiling its most austere budget in more than 30 years in a bid to bring the country’s public finances under control.
“Global equity markets struggled during the first week of April as the latest US Federal Reserve minutes threw more cold water on hopes for another round of quantitative easing and a troubling rise in Spanish bond yields. Fund flows reflected this rise in risk aversion,” according to EPFR Global.
The data shows that Asia ex-Japan equity funds and Latin American equity funds were hit by their highest outflows in 15 and 25 weeks respectively. Meanwhile, emerging market local currency bond funds saw their nine-week run of inflows snapped, while commitments to high-yield bond funds dropped to their lowest in the year to date.
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