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Central bank support boosts Equity Fund flows in mid-June
With the US Federal Reserve voicing support for the goal of sustaining the current recovery, the Bank of Japan continuing to run its ultra-accommodative monetary program and the People’s Bank of China (PBOC) committed to ‘targeted stimulus’, equity investors made a return during the second week of June. EPFR-tracked US, Japan and China Equity Funds all took in fresh money, enabling Equity Funds overall to post inflows for only the second time since mid-March.
The European Central Bank (ECB) is also promising more support for a flagging regional recovery, and Europe Bond Funds extending their longest inflow streak since 1H15. But political noise, ranging from the ruling Conservative Party’s leadership contest in the UK -- and its implications for Brexit -- to Italy’s threats to launch a parallel currency, drowned out the ECB’s signal for equity investors: Europe Equity Funds posted outflows for the 18th week running.
Overall, the week ending June 12 saw a net $3.2 billion flow into EPFR-tracked Equity Funds while Bond Funds absorbed another $16.7 billion and Money Market Funds $23.6 billion. Since the beginning of May investors have steered over $135 billion into Money Market Funds which, collectively, are on pace to exceed the full-year totals for 2017 and 2018 by the end of the month.
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