According to the latest statistics from EPFR Global, large redemptions from German equity ETFs (those tracking the DAX index) were partly responsible for the biggest weekly outflows in European equity funds since August last year.
In total $4.6bn was taken out of Europe equity funds, which was spurned by “the collapse of the Netherland’s government and the socialist candidate’s victory in the first round of the French presidential election”.
EPFR Global said investors interpreted these developments as blows to the consensus that getting public finances in order is the key to resolving the eurozone’s sovereign debt crisis.
Even excluding ETFs, Europe equity funds still saw $696.4m taken out by investors, although small contrarian flows into Spain, Italy, Greece and the Netherlands equity funds suggest some investors still feel the currency union will come out the other side of this latest bout of uncertainty.
Investors in Europe did turn to US equity funds, however, after encouraging corporate earnings and economic data made it a more attractive market.
In addition, bond funds with exposure across the pond received favourable treatment, attracting 90% of the $4.8bn that flowed into the asset class last week.
In contrast, equity funds saw outflows of $7.4bn in total, although those with a dividend focus continued to take money in, bringing their year-to-date total up to $17.3bn.
