Money apparently wants to be aggressive here. EPFR Global tracks the daily, weekly, and monthly equity and fixed income fund flows and monthly fund allocations by country, sector, and security. The latest EPFR Global fund-flow report showed that long-only stock funds had their first inflows in nine weeks this week. Inflows to long-only stock funds and stock ETFs beat bond inflows for the second straight week.
- Biggest inflows to emerging-market equities ($3.5bn) since April 2011 $EEM
- Investors rotated out of Treasurys, investment-grade bonds and money-market funds into riskier areas like high-yield bonds, emerging-market debt and financial funds $HYG $HYT $TLT
- Solid inflows ($493M) to gold and precious metals for the second straight week $GLD $GC_F
- Money market funds saw $25B outflows, the biggest since August 2011
- Financials saw a sixth straight week of inflows, the longest streak since January 2011 $XLF
- Europe, Middle East and Africa equity funds broke a 25-week losing streak
- Latin American stock funds broke a 13-week losing streak
- Emerging-market Asia broke a 12-week losing streak
So what do we make of this? Too little too late? Are investors chasing the October rally here? Or are the underinvested finally realizing that they need to be more involved? The latter has been my opinion and still is today.