More than $17 billion (€12 billion) of net new money flowed into European equity funds between the start of the year and the end of the second week of February, which EPFR Global says is a record-setting start for 2014.
Investors seem finally to have forgotten their fears about the peripheral European countries and plugged money into the likes Portugal, Italy, Ireland, Greece and Spain. Net inflows to Italy and Spain equity funds were, year-to-date, equivalent to 9% of the funds' assets under management at the start of the year.
Money continued to flow out of emerging market equity funds but at a slower pace, as net redemptions halved in the second week of February.
Among emerging market products, “redemptions from funds with local currency mandates exceeded those from hard currency funds by a 10-to-1 margin”, says EPFR Global.
Overall, equity funds took in $11.5 billion of net new money in the week while bond funds took in a net $4.7 billion.
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