Global bond funds continued to build upon momentum gained in previous weeks while emerging market bond funds had net outflows for the fourth week in a row, according to data released Monday by Emerging Portfolio Fund Research.
Global/International equity funds saw steady inflows of $238 million, and bond funds pulled in $139 million last week. Equity funds saw $132 million walk out the door during the same time frame. EPFR said that during the week, equity funds were overwhelmed as investors in Europe, the U.S. and Japan pulled money out of the funds. U.S. equity funds saw outflows of $118.5 million, marking four weeks of outflows in the last five weeks. Investors have yanked money from European equity funds for three straight weeks and two out of the last three weeks for Japan equity funds.
"It appears that investors are being cautious ahead of the U.S. presidential elections and are also concerned about slowing global growth and high oil prices, which has led to their increasing allocations to bond funds at the expense of equities for the better part of October," said Brad Durham, managing director of EPFR. "Its not so much a question of whether its Bush or Kerry, but rather the uncertainty that weighs on investors minds, especially if the election results are not immediately clear. The higher aversion to risk also favors global bond funds over emerging market bond funds for the time being."