Downturn fund outflows echo 2008

Water_tapGlobal outflows from a number of fund sectors in the week ending 10 August hit levels not seen since the financial crisis in 2008.

Figures from fund data provider EPFR Global show that equities suffered outflows of $26.1bn (€18.3bn), the worst since late Q2 2008, and bond fund redemptions hit a record $10.4bn.

The various ongoing economic concerns and associated gloomy sentiment pushed investors to pull out money in droves almost across the board but emerging markets equity, global equity, bond, balanced, real estate and US equity sectors were particularly badly affected.

Emerging market equities alone waved goodbye to $7bn of outflows, the highest since the third week of 2008, while even the recent safe haven of German equities took a dip in the red.

High yield bonds accounted for two thirds of the week’s bond outflows. EPFR Global’s research director, Cameron Brandt, said: “Concern that weaker growth will undermine the ability of more borrowers to service their debts seems to be the main driver of this exodus.”

Apart from money market funds, which saw global inflows of $49.8bn, there were also net inflows into gold and precious metals commodities, emerging markets local currency bonds and Japan equities.

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