US equity funds see record outflows

US congressInstitutional investors pulled $28.3 billion (€20.9 billion) from all equity funds in the week ending February 5, setting a record for US equity outflows.

In a move by investors that may reflect how they are struggling to adapt to the US change in monetary policy, a record was also set for flows into US bond funds.

Though specific figures were not given, institutional redemptions from EPFR Global-tracked US equity funds and commitments to US bond funds both set new records in dollar terms going into February, according to EPFR Global, which says markets around the world continue to struggle with the shift in US monetary policy, China’s slower growth and the cautious tone of the latest corporate earnings forecasts.

EPFR Global tracks funds holding $23.5 trillion.

Emerging market equity funds accounted for a fifth of the equities total.

Describing it as a “mini-rotation” by institutional investors between US-dedicated fund groups, the flows also set a record for all bond funds. A net $14.7 billion flowed into all bond funds.

When measured in percentage of assets under management terms the flows into bond funds were the biggest since early in the second quarter of 2010, and the redemptions from equity funds the largest since mid-Q3 2010. Institutional commitments to all bond funds, in these terms, hit levels last seen in Q1 2006.

Flows into gold and Japan equity funds jumped to 19 and 36-week highs respectively, while Turkey equity funds took in fresh money for the seventh straight week.

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