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Investors pull over £7bn from funds on US, China and Syria fears

nicoll

The return of concerns such as US policy and the Syrian civil war pushed investors to pull money from both equity and bond funds last week.

Fund flow data provider EPFR Global shows that $11.4bn (£7.3bn) was redeemed from equity funds across the globe during the week ending 4 September 2013 while bond portfolios witnessed net outflows of $284m.

US equity funds were hit by more than $9bn in net outflows over the week as investors questioned the strength of the country’s recovery, while almost $6bn was withdrawn from emerging market equity and bond funds as investors continued their flight from the space..

EPFR Global says: “Investors left for the last of their summer vacations with Syria’s civil war, China’s economy and US policy – foreign, fiscal and monetary – on their minds. They returned with the same issues still front and centre.

“Fears that the US economy faces higher taxes, oil prices and interest rates in [the fourth quarter] as the Federal Reserve takes the first step to wind down its quantitative easing programme, the US becomes more involved in Syria’s civil war and lawmakers wrestle with spending limits and debt ceilings kept the pressure on US equity funds and most emerging markets fund groups in early September.”

However, European equity funds were able to add another week of inflows as investors respond to better economic data coming out of the region. The funds are benefiting from the longest inflow streak since the 13-week run that ended in the second quarter of 2006.

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