A US rate hike prompted retail investors to return to US equity funds last week, data shows.
Although a figure was not given, equity funds overall absorbed a net $5 billion (€4.3 billion), according to EPR Global, which tracks fund flows.
Despite the inflows, US equity funds experienced net redemptions during the week. Retail flows hit levels last seen in late 2015 – a sentiment which was viewed as a sell signal by institutional investors.
Meanwhile, flows into Europe bond funds exceeded $1 billion during a week that ended with a sell-off triggered by European Central Bank President Mario Draghi’s remarks about the return of inflation in markets such as Portugal, which fed investor fears that the Eurozone’s central bank was setting the stage to start winding down its current quantitative easing programme.
European equity funds, which ended June the previous year with the biggest quarterly outflows on record on the back of Brexit concerns, continued their inflow run to 14 consecutive weeks.
Emerging markets equity funds ended June having absorbed nearly $40 billion year-to-date. Their total inflow for the quarter was the biggest since the third quarter of 2014.
India continued to be the most popular single market for investors, as solid growth and the prospect of lower interest rates, together with good monsoon rains boosting crop production and curbing food prices, prompted investors to steer money into dedicated India equity funds for 16 consecutive weeks.
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