Global uncertainty drives fund outflows
Concerns about global economic growth have led to outflows from 19 of the 25 major equity, bond and sector fund groups monitored by funds data tracker EPFR Global over the past week.
Investors redeemed $2 billion from high-yield bond and commodities sector funds, and continued reducing their exposure to Asian exporters.
But one theme that was standing out among the outflows was an increased appetite for dividend-paying equities, according to EPFR Global director of research Cameron Brandt.
"Recently the flows have been more along sector than country lines, but so far this year equity funds with a dividend focus have pulled in nearly $13 billion, versus collective outflows for all the equity funds we track of over $45 billion," Brandt said.
Amid sovereign debt worries in the Eurozone, investors have turned to the 'safer' sovereigns, with German, Canadian and Swiss equity funds recording record inflows for the week ending 17 August, according to EPFR Global managing director Brad Durham.
"At least in the developed markets space investors are heeding the old dictum that in tough times you invest in the creditor, not the debtor," Durham said.
US equity funds recorded moderate outflows, as redemptions from US exchange-traded funds balanced out inflows into actively managed funds - although the EPFR data didn't take into account the recent poor employment and industrial production data, Durham added.
Emerging markets equity funds came in at $2.77 billion, with Asia ex-Japan equity funds accounting for over half of that amount, as investors became less bullish about exporters in the region.
Middle East and Africa equity funds extended their run of outflows to 15 weeks, as civil unrest, weaker oil prices and a softening outlook for commodities took their toll.
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