Inflows into equity funds showing no signs of letting up – Deutsche Bank

Investing.com — Inflows into equity funds clocked $25.4 billion last week and are showing no signs of letting up, according to analysts at Deutsche Bank.

In a note to clients, the analysts added that equity funds — or an investment fund that brings together money to trade primarily stocks — have now seen cumulative inflows of $325 billion since mid-April and $525 billion since last November.

Last week, US funds continued to receive “robust” inflows of nearly $11 billion, although the analysts noted that the mark was down from the prior week. Stocks have touched new record highs on Wall Street as traders’ appetites for riskier assets was stoked by the US Federal Reserve’s decision earlier this month to roll out a super-sized 50-basis point interest rate cut.

Inflows into Chinese equity funds also surged to $8.2 billion in the week up to last Friday, the analysts said, adding that the trend was spurred on by China’s move to announce a slew of new stimulus measures aimed at reinvigorating activity in the world’s second-largest economy.

Among sectors, consumer goods registered weekly outflows of $2 billion, the biggest weekly outflow since February 2014. The financial sector also saw a third straight week of outflows, with $800 million departing. Energy, utilities, real estate, industrial and tech funds also posted outflows.

Meanwhile, inflows into bond funds, which pool investors’ money to invest in debt securities and produce monthly income, slowed to a three-week low of $12.7 billion. However, the analysts said inflows into these funds were still “robust.”

At the same time, money market funds — an open-ended mutual fund that invests in short-term securities and is designed to provide typically higher yields than other cash products — received “massive” inflows of $129.1 billion last week, the largest in 18 months.