European equity fund inflows hit 66-week high as recession ends

News that the eurozone has exited its longest recession on record prompted investors to pour money into European equity funds last week, global sales data suggests.

Figures from fund flow analyst EPFR Global show that European equity funds benefited from more than $2bn (£1.3bn) in new money during the week ending 14 August. Within this, commitments from retail investors hit their second highest year-to-date total.

Last week, a preliminary estimate by European Union statistical office Eurostat suggested that the eurozone grew by 0.3 per cent in the second quarter of the year, driven by Germany and France. This brought to an end the 18-month-long recession that blighted the single currency bloc.

EPFR Global says: “The robust flows into Europe equity funds stood out during a week when many investors were on vacation, literally and figuratively, with most major fund groups recording lackluster flows either way.

“At the country level Italy equity funds posted their biggest weekly total in over a decade despite the fact Italy is one of four eurozone economies that did not return to growth in 2Q13. One that did, France, continues to be viewed with skepticism: redemptions from France equity funds hit a 10-week high.”

Overall, equity funds tracked by EPFR Global recorded net inflows of only $1.3bn for the week ending 14 August, while bond funds were hit by redemptions of $1.4bn.

Emerging market equity funds saw flows turn negative for the eighth week in 12, with China and Brazil being two of the markets to witnessed a further pullback from investors. Emerging market debt funds saw an extension of the outflow streak that started in late May.