Equity fund inflows hit one-year high

EPFR Global data shows funds had combined inflows of $9.52 billion last week, the highest weekly tally since mid-June 2008.

Better-than-expected earnings and macroeconomic data have led to an increase in demand for a broad range of asset classes, with 21 of the 24 major equity, fixed income and sector fund groups tracked by EPFR Global posting inflows for the week ending July 29.

Overall, funds had combined net inflows of $9.52 billion -- the highest weekly tally since mid-June 2008 -- while fixed-income fund groups, excluding money market funds, took in a net $4.36 billion.

Emerging market bond and US equity funds hit 52- and 32-week highs, respectively.

At least some of this money came from money market funds, which reported net redemptions of nearly $18 billion for the week as year-to-date outflows from last year's "safe haven" moved close to the $200 billion mark.

Asia ex-Japan equity funds had net inflows of $1.56 billion in the last week of July, while diversified global emerging markets equity funds posted net inflows of $905 million.

Funds investing in Brazil, Russia, India and China (Bric) markets continue to attract investments. Net inflows into India equity funds hit a year-to-date high of $211 million. China and Greater China equity funds posted net inflows of $711 million, while both Russia and Brazil equity funds posted inflows in excess of $100 million.

Funds investing in frontier markets also did well. Vietnam equity funds enjoyed their second best week year-to-date, taking in a net inflow of $17 million.

The combination of a better-than-expected second-quarter corporate earnings season and the first overall month-on-month rise in house prices since the third quarter of 2006 helped US equity funds snap a six-week outflow streak as this fund group enjoyed its biggest weekly inflow since mid-December.