Investors throw in the towel for 2011
From Products Dec 21 2011 BY: Esther Armstrong
, Senior Reporter
, Portfolio Adviser
Investors have sold out and are waiting for the New Year to see "how the land lies", according to latest fund flows from EPFR Global.
Cameron Brandt, research director at the firm said its latest data showed all of the major country and regional equity fund groups and most of the sub groups experienced outflows in the week to 14 December.
Equity funds saw redemptions of $9.5bn (€7.3bn, £6bn) in their fourth straight week of outflows, while bond and money market funds witnessed inflows of €1.1bn and €3.2bn respectively.
Compared to the previous agreement to contain the eurozone debt crisis, arrived at in late October, the latest pact announced on 9 December only buoyed investors for two trading days.
EPFR Global said equity funds saw their first daily inflow in over a week on 12 December, but this was followed by their biggest one-day outflow since early August.
Outflows from emerging market equity funds accelerated in the second week of December, with year-to-date outflows hitting $38.8bn versus inflows of $91.5bn for the comparable period last year.
Asia ex-Japan funds continued their poor run, as investors pulled money out of them for the 17th time in the past 19 weeks. China at the centre of the region saw redemptions for the fourth week running.
"The angst over China seems curious given its still super-sized growth rate," Brandt said, "But then you look at commodity prices, the trend in the A shares market and the increased interest from short sellers and wonder what surprise might be lurking."
The nagging doubts about China have also had a knock on effect on Latin America's biggest economy, with outflows from Brazil equity funds jumping to their highest level since the third week of March and Latin America Equity funds posting their biggest outflow in two months.