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Bond and equity funds that invest in global and emerging markets suffered a net outflow of $9.5 billion last week, according to Massachusetts-based EPFR Global, which tracks around $10 trillion in assets in traditional and alternative funds worldwide.
In contrast, US equity funds attracted $10 billion in net inflows and US money market funds gained $11 billion.
US equity funds recorded net inflows for the eleventh time in 13 weeks ôdespite their relatively modest gains compared to the major emerging markets fund groups and the whip-sawing that investor sentiment received from the uneven progress towards an accord on the proposed $700 billion bailout of AmericaÆs financial sectorö, says EPFR Global. The bulk of the new money flowed into US large-cap blend and US sector funds and, for the first time in five weeks, growth-oriented funds outperformed their value peers across all capitalisations.
Global financial and energy sector funds attracted more than $4 billion in net inflows, including $500 million in inflows to commodities, consumer goods and real estate sector funds.
ôGiven the recent market volatility, investors are currently responding to a variety of compelling forces that include finding some degree of safety, timing the bottom of various markets and sectors, hedging against the dollar weakness they expect down the road and a desire to make money out of a broadly falling market,ö says Cameron Brandt, a Massachusetts-based senior analyst at EPFR Global.
ôThe sense that government support will stabilise the financial sector seems to be an important factor in the flows into financial sector funds,ö he adds.
Meanwhile, the fresh turmoil on Wall Street ôserved to highlight the relatively unencumbered balance sheets of Japanese banks and the reliance of many top-tier companies on retained earnings to finance investmentö, EPFR Global says.
Japan equity funds recorded net inflows for the first time since mid-July. Sentiment was also helped by the swift selection of a replacement for Yasuo Fuduka, the former prime minister. His successor, Taro Aso, is expected to outline some of his economic policy goals for the countryÆs sluggish economy in a speech to JapanÆs parliament today.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.