Investors edge back into equities

barchart_rising_410Positive economic forecasts for Europe and the expectation of further quantitative easing in the US has led to the highest levels of net inflows into equity funds since March 2009.

Figures for October from the European Fund and Asset Management Association (Efama) showed that Ucits funds recorded inflows of €7bn, up from outflows of €12bn seen in September. 

Over the month, long-term Ucits, that is, excluding money markets, saw inflows of €26bn. This, according to Efama, was due to a large rise in the sale of equity funds which leaped to €13bn in October, up from the flat levels seen in August and September.

The association said the renewed confidence among investors was a result of Increased growth forecasts for Europe on the back of higher-than-expected real activity in Germany and expectations of further quantitative easing in the United States. 

Although investors are edging back to the equity market, bond funds continued to record inflows in October, reaching €8bn, up from €5bn in September.

In contrast, investors continued to pull money out of money market funds, which saw outflows of €22bn in October.  This result reflected continuing low interest rates and tough competition from banks actively seeking to increase their deposit base to improve their liquidity position.

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