Investment sentiment darkens, again
Monetary easing in both the US and Europe provided only short-term boosts to investor sentiment, according to the latest data released by funds tracking and analysis firm EPFR Global.
In its latest analysis, the company said the champagne that was uncorked in September in the wake of the US Federal Reserve and European Central Bank's confirmation of further quantitative easing had lost its fizz by early October.
It said this was because investors had switched their focus to America's "fiscal cliff" and Spain's efforts to escape the budgetary straight-jacket that accompanies eurozone bailout packages.
The EPFR analysis said this had resulted in European equity funds seeing a three-week streak of inflows come to an end, while US equity funds had posted their second consecutive weekly outflow.
It said flow data from the week ending 3 October also suggested that recent moves by central banks had prompted investors to reassess their strategies for maximising yield in such a low-interest environment.
The analysis said dividend equity and high-yield bond funds had posted outflows for the first time since June, while commitments to mortgage-backed bond funds had hit a 17-week high.
Socially responsible investments funds had recorded their best week since the first quarter, and both emerging market equity and bond funds had attracted over $1 billion in inflows.
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