Global and US Equity Funds ride a warm updraft in early February
A week that started with a coronavirus-induced whimper ended on Feb. 5 with US President Donald Trump’s impeachment trial ending in acquittal, the release of data showing US private payroll growth in January hit its highest level since mid-2Q15, the UK officially outside the European Union and Chinese authorities talking about viral cures and rolling back some tariffs on American goods. As a result, benchmark US equity indexes hit fresh record highs and flows into EPFR-tracked Developed Markets Equity Funds climbed to a 13-week high.
The headline number for Developed Markets – and all – Equity Funds would have been even higher were it not for over $2 billion in UK Equity Fund redemptions that reflect the liquidation dividend payouts by Blackrock to investors in the LF Equity Income Fund, the Neil Woodford-managed fund that crashed last year due to asset liquidity mismatches.
While equity markets have been getting the headlines, Bond Funds continued to pull in above average amounts of fresh money with net inflows since the start of the year moving past the $85 billion mark. “Looking at flows by fund group, the balance between the desire to preserve capital and yield hunger remain tilted towards the former,” noted EPFR research Director Cameron Brandt. “But we are seeing that balance shift towards yield as the latest round of central bank easing begins to bite.”
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