Japan and Real Estate funds stumble in mid-October

Japan and Real Estate funds stumble in mid-October

Mutual fund investors kept faith with emerging markets equity and bond funds during the second week of October, according to data from EPFR Global.

Fund flows data taken from 65,000 traditional and alternative funds domiciled globally with $24.5 trillion (£20.04 trillion) in total assets under management showed the prospect of another hike in US interest rates, uncertainty about oil prices, the British pound's free-fall and a bumpy start to the third quarter corporate earnings season gave them plenty to chew on ahead of the next round of central bank meetings. 

EPFR’s data showed investors responded by pulling the biggest amounts out of Europe bond and Japan equity funds since the second quarter of 2015 and fourth quarter of 2014 respectively, snapping Municipal Bond Funds lengthy inflow streak and redeeming more money from real estate sector funds.

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The week ending 12 October saw investors extend Europe equity funds record-setting outflow streak, pull modest amounts out of US equity funds and remove more than $2bn (£1.63bn) from Japan equity funds as the third quarter corporate earnings season kicked off and foreign currency markets responded to fresh drops in the value of the British pound sterling. 

Monetary policy also remained at the forefront of investor concerns: the Bank of Japan, European Central Bank, US Federal Reserve and Bank of England all meet during the two weeks between 20 October and 2 November.