Trade, policy debates and weak growth weigh on Europe Funds
The third week of November saw Europe Equity Funds longest inflow streak since 1Q18 come to an end and redemptions from Europe Bond Funds jump to a 49-week high as investors responded to policy divisions within the continent, slowing economic growth and the continuing headwinds generated by the more protectionist US stance on trade. Spain’s recent election, which saw populist parties make gains and left the region’s fifth largest economy in the hands of a caretaker government, gave investors further reasons for caution.
Investors also took a modest step back from some fund groups dedicated to riskier asset classes, with Emerging Markets Bond Funds recording outflows for the first time in six weeks and High Yield Bond Funds posting consecutive weekly outflows for the first time since early June.
Overall, EPFR-tracked Bond Funds posted a collective inflow of $6.9 billion during the week ending November while $1.5 billion flowed out of Equity Funds despite the third highest inflow on record for Equity Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates and positive flows to Dividend Equity Funds for the ninth time in the past 10 weeks.
The latest week was also marked by a new milestone for the Exchange Traded Funds (ETFs) tracked by EPFR, with the collective AUM of those tracked both daily and monthly hitting the $6 trillion mark.
For more insight subscribe here.