European politics shakes domestic flows

Europe globeEquity funds within Europe took different turns last week against the political backdrop.

France equity funds recorded their biggest inflow since the third quarter of 2011, according to EPFR Global, suggesting investors had liked the vision for Europe presented last week by Emmanuel Macron, the French president.

Meanwhile, Germany equity funds posted outflows for the fourth time in the past five weeks. This almost certainly was the impact of the German election in the previous weekend, in which Angela Merkel was returned to power on a smaller majority.

In Spain, it appears to have been the impending referendum on Catalan independence. Redemptions from Spain equity funds climbed to a 59-week high.

Cameron Brandt, research director at EPFR Global, said flows mirrored “to an unusual degree the latest political currents”.

Emerging markets equity and bond funds retained their appeal for investors, Brandt said. EPFR-tracked emerging markets equity funds posted inflows for the sixth straight week as retail support continued to rebound.

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