Better US outlook shapes global fund flows
US productivity numbers and Fed chairman Ben BernankeÆs support of a stronger dollar improves sentiment for equities worldwide.
Emerging market and Japan equity funds extended their inflows last week while US equity, US bond, energy and commodities bonds also posted solid inflows due largely to an improved outlook for the US, according to EPFR Global. Based in Massachusetts, EPFR Global tracks around $10 trillion in assets in traditional and alternative funds worldwide.
On top of the shift in sentiment regarding US prospects, last weekÆs data also ôreflects a degree of stability that we havenÆt seen in a whileö in terms of fund flows, says EPFR Global managing director Brad Durham.
On the flipside, global bond funds were hit with redemptions for a 17th straight week and Europe equity funds for the fifth time in the past six weeks. At the country level, Malaysia equity funds recorded outflows for the ninth week in a row.
With the first quarter productivity growth coming in at 2.6% in the US, many investors concluded that the pressure on earnings from weaker demand and inflation may well be less than anticipated. EPFR Global-tracked US equity funds took in $3.24 billion last week, their second consecutive week of inflows and best showing in dollar terms since mid-March. Funds managed for growth outperformed their value counterparts, in both flow and performance terms among large- and mid-cap funds, but the opposite was true for small-cap funds.
Recent US data and US Federal Reserve chairman Ben BernankeÆs statements in support of a stronger dollar bolstered investor sentiment towards Japan in general and its exporters in particular, EPFR Global says.
Japan equity funds have turned in by far the best portfolio performance among the major fund groups, a 5.6% gain, as they extended their inflow streak to five straight weeks. A shift in official assessments of JapanÆs outlook, which now highlight the risks, has also eased concerns that fiscal or monetary policy will be tightened in the coming months.
For the second week running solid flows into Europe, Middle East and Africa (EMEA) equity funds, driven by enthusiasm for commodity-rich Russia, allowed EPFR Global-tracked emerging markets equity funds collectively to post net inflows despite redemptions from Asia ex-Japan equity funds and broad concerns about the ability of many countries to cope with the recent inflationary spike.
Flows into EMEA equity funds amounted to $391 million, their seventh consecutive week of net inflows. Russia equity funds accounted for $212 million of that total as oil prices remained above $120 per barrel and both public and private spending grow at a brisk pace.
On top of the shift in sentiment regarding US prospects, last weekÆs data also ôreflects a degree of stability that we havenÆt seen in a whileö in terms of fund flows, says EPFR Global managing director Brad Durham.
On the flipside, global bond funds were hit with redemptions for a 17th straight week and Europe equity funds for the fifth time in the past six weeks. At the country level, Malaysia equity funds recorded outflows for the ninth week in a row.
With the first quarter productivity growth coming in at 2.6% in the US, many investors concluded that the pressure on earnings from weaker demand and inflation may well be less than anticipated. EPFR Global-tracked US equity funds took in $3.24 billion last week, their second consecutive week of inflows and best showing in dollar terms since mid-March. Funds managed for growth outperformed their value counterparts, in both flow and performance terms among large- and mid-cap funds, but the opposite was true for small-cap funds.
Recent US data and US Federal Reserve chairman Ben BernankeÆs statements in support of a stronger dollar bolstered investor sentiment towards Japan in general and its exporters in particular, EPFR Global says.
Japan equity funds have turned in by far the best portfolio performance among the major fund groups, a 5.6% gain, as they extended their inflow streak to five straight weeks. A shift in official assessments of JapanÆs outlook, which now highlight the risks, has also eased concerns that fiscal or monetary policy will be tightened in the coming months.
For the second week running solid flows into Europe, Middle East and Africa (EMEA) equity funds, driven by enthusiasm for commodity-rich Russia, allowed EPFR Global-tracked emerging markets equity funds collectively to post net inflows despite redemptions from Asia ex-Japan equity funds and broad concerns about the ability of many countries to cope with the recent inflationary spike.
Flows into EMEA equity funds amounted to $391 million, their seventh consecutive week of net inflows. Russia equity funds accounted for $212 million of that total as oil prices remained above $120 per barrel and both public and private spending grow at a brisk pace.
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