A crushing year for equities funds

Crashing_downThe end of 2011 finished a terrible year for equity funds, which collectively suffered outflows of $160 billion (€120 billion), according to data provider EPFR Global.

Developed market funds and emerging market funds each shrank in size as investors switched money into the comparative safety of bond funds, which gained more than $110 billion over the year.

Latin America, India, Europe and Brazil funds were among the fund groups that saw record outflows. Financial and energy sector funds also saw their worst-ever outflows.

Japanese and German equity funds were among the few fund groups to make a net gain in 2011, though both saw outflows in the final quarter of the year.

United States equity funds were one potential beacon, with inflows of $4 billion in the final quarter. Though this did not offset negative flows earlier in the year, the performance did at least hint at an improvement in the coming year. EPFR said it was mainly institutional money that supported US equity funds in the final quarter, making up for a lack of enthusiasm among retail investors.

©2012 funds europe