Equity investors get back on the horse in early February

Flows into Equity Funds jumped to a 21-week high during the first week of February, with over $35 billion committed to US Equity Funds, as investors responded to the cheaper valuations on offer after January’s sell-off. But the fear that the Federal Reserve could hike rates at each of their remaining 2022 policy meetings, which triggered the recent declines in US equity markets, continued to chill appetite for bonds. The Bond Funds tracked by EPFR posted their fifth consecutive outflow, a run that has seen over $35 billion redeemed since the second week of January.

While the Fed signaled its intention to tackle an inflation rate running at a 40-year high back in late November, the European Central Bank (ECB) only pivoted from its ‘transitory’ narrative earlier this month. During the week ending Feb. 9, flows to Europe Equity Funds came in at a healthy $2.2 billion while nearly $5 billion was pulled out of Europe Bond Funds.

While showing real sensitivity to interest rate risk, mutual investors remain comfortable with other kinds of risk. Alternative Funds posted their fourth straight inflow and sixth in the past seven weeks while three of the four major Hedge Fund groups took in fresh money.

The latest Hedge Fund Flows data, drawn from a more granular but lagged dataset that incorporates funds tracked by partner BarclayHedge, shows that funds with multi asset, long-short, macro and event driven strategies were the most popular with investors in 4Q21. Unconstrained fixed income and diversified commodities trading strategies were the least popular.

Overall, EPFR-tracked Equity Funds attracted a net $46.7 billion during the week ending Feb. 9. Investors committed $1.9 billion to Alternative Funds and $1.97 billion to Balanced Funds while Bond Funds experienced net redemptions of $10.4 billion and $47.4 billion flowed out of Money Market Funds.

Did you find this useful? Get our EPFR Insights delivered to your inbox.

Related Posts

Another turn of the screw in Europe

Another turn of the screw in Europe

The question of when major central banks will declare victory in their battles against inflation or, in the case of China, misallocation of credit and shift their focus to economic growth continued to preoccupy investors during the second week of September. Based on flows to EPFR-tracked funds, the current answers are soon (the US), not soon enough (China) and not as soon as we thought a week ago (Europe).

Keeping the powder dry in early September

Keeping the powder dry in early September

The first week of September saw EPFR-tracked Money Market Funds absorb over $65 billion as investors waited to see which way interest rate winds are blowing in the US and Eurozone. Also giving them pause for thought are the health of China’s economy, the durability of the latest bump in oil prices and the resilience of key real estate markets.

Better, More Actionable Insights

Let us show you how EPFR can create value for your specific strategy

First Name
Last Name
Email Address
Job Title
Company
Country
Contact Number
View our privacy policy.