Many of the world’s major market drivers “were in neutral or first gear” in the third week of May according to fund flow analysis firm EPFR Global.
The firm said that dampened market sentiment in May was a result of a wide combination of factors including the fact that another US rate hike next month was viewed as a done deal and the fact that US President Donald Trump’s policy initiatives “are being heavily discounted”.
EPFR added that the fact that Europe’s populist tide is apparently ebbing and that the first quarter earnings season is largely done and dusted had also contributed to the subdued mood.
OPEC agreeing to extend its current production capping agreement was also a contributory factor, EPFR said.
“Fund flows for the week ending May 24 reflected this absence of conviction, following the pattern of recent weeks but well off the pace seen earlier in the quarter,” EPFR said in a statement.
Flows into global and emerging bond funds were, according to EPFR, roughly a quarter of the previous week’s totals while redemptions from US equity funds dropped by two-thirds.
At the asset class and single country fund level, redemptions from Germany equity funds hit a 56-week high while Italian bond funds posted outflows for the fourteenth time in the past 15 weeks.
Overall, investors last week steered $7.75 billion (€6.94 billion) into EPFR global-tracked bond funds and $1.6 billion into equity funds. A net $14.5 billion flowed out of money market funds.
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