Investors favour US, emerging markets and Asian equities

EPFRStrong second quarter earnings from US companies and the favourable results from the European bank stress tests led to robust inflows into US, global emerging market (Gem) and Asia ex-Japan equity funds.

Inflows into bonds remained strong but equity sector fund flows were defensive as commodity funds saw one of their biggest weekly outflows.

Figures from data provider EPFR showed that perceptions of the global recovery remained disparate at the end of July. Gem and Asia ex-Japan equity funds saw over US1$bn (€760.3m) in inflows during the last week of the month.

US equity funds also had a good week, seeing $7.3bn in inflows, making their best week year to date. For only the sixth time this year, European equity funds also posted inflows, with German equity funds absorbing the majority of the $238m allocated to the European products.

EPFR said that for the second week running, flows in and out of the sector fund groups it tracks had a distinctly defensive flavour. Investors withdrew over $1bn from commodity sector funds. This is the biggest week-total since the firm began tracking these funds. Energy and financial sector funds also suffered outflows during the last week of July.

Sectors that fared well were those with a defensive reputation. Consumer goods, utilities and healthcare all posted inflows, taking in more than $400m during the week. Technology funds also pulled in $151m off the back of the good second quarter company earnings.

Flows into EPFR-tracked bond funds remained strong, as all major groups attracted over $1bn over the week. Emerging markets bond funds had their second best week of the year, global bonds absorbed $1.53bn. High yield and US bond funds also saw inflows.

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