Frontier and northern climes beckon to investors searching for fresh horizons
For all the noise generated by the political crisis in the Ukraine, investors looking ahead in late April saw an investment landscape characterised by a surprising degree of stability.
With the US Federal Reserve, Bank of Japan and European Central Bank sticking to their current policies and governments of all stripes constrained by some combination of political gridlock, electoral considerations and fiscal considerations, market volatility – and the opportunities that come with it – has been running at very low levels and yield remains scarce.
As of yet, investors have not responded to this uninspiring vista by selling and going away. In late April they started moving out of some of last year’s more popular fund groups and searching for pockets of value at the country level.
During the week ending April 30 EPFR Global-tracked balanced funds posted their first outflow since mid-December, redemptions from floating rate bond funds hit their highest level in over 32 months and Spain bond funds posted their biggest weekly outflow on record while flows into Australia and Canada equity and Sweden bond funds hit 123, 32 and 78 week highs respectively.
Overall, equity funds collectively absorbed USD4.12 billion despite commitments to emerging markets equity funds falling to their lowest level since late March.
Bond funds took in another USD3.83 billion, taking their year-to-date total past the USD50 billion mark, while money market funds saw over USD25 billion pulled out.
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