Retail investors are behind the eight ball on Europe. Institutional investors have consistent buyers for the past three months, says the fund trackers at EPFR Global. One look at Vanguard’s FTSE Europe (VGK 66,41 +0,11 +0,17%) ETF over the period and you can tell. The fund is up 8.16%, beating the S&P 500 by nearly 200 basis points.
The last week’s flows into European equity funds were the largest in over a year. “Our fund flow data shows that institutional investors have been buying into the equities rally that started in the middle of last year for over three months now,” says EPFR Global Research Director Cameron Brandt. “Retail investors are still keeping their distance.”
Developed market equity funds boosted their year-to-date inflow total by another $7 billion during the week ending Feb. 22 despite polls in France favoring National Front Candidate Marine Le Pen. Political risk remains the biggest reason retail investors are reluctant to buy European securities, and perhaps one of the reasons why investment advisors are not pushing those funds onto their clients.
In The Netherlands, the nationalist Party for Freedom is leading in the polls with less than three weeks to go before election day. France’s political outlook looks abysmal, with business-as-usual Francois Hollande’s approval rating in the single digits. Investors are most bullish on Spain, however. Inflows hit a 22-week high but the iShares MSCI Spain (EWP 32,17 -0,19 -0,59%) fund is pretty much a laggard. It’s tracking FTSE Europe over the last 12 months, but is down in comparison year-to-date.
European bond flows saw another billion dollars pulled from them last week as investors give up on negative yield.
Meanwhile in the U.S., investors are largely buyers of commodity funds and financial sector funds. Two ETFs in this space are the iShares S&P GSCI Commodity Index (GSG 22,77 +0,17 +0,75%) and the Vanguard Financials (VFH 99,83 -1,13 -1,12%). Gold is the bulk of the commodity inflow, however, which is why GSG is down in the last five days but the SPDR Gold (GLD 211,52 -1,22 -0,57%) ETF is up.
Domestic investors have been sellers of healthcare funds (XLV 141,95 -2,08 -1,44%) and utility funds (XLU 64,97 -0,13 -0,20%) this past week.
EPFR Global Flow Data: Smart Money Buying Europe
Smart Money Bets On Europe While Retailers Still Gun Shy, EPFR Weekly Fund Flow Data Shows
Retail investors are behind the eight ball on Europe. Institutional investors have consistent buyers for the past three months, says the fund trackers at EPFR Global. One look at Vanguard’s FTSE Europe (VGK 66,41 +0,11 +0,17%) ETF over the period and you can tell. The fund is up 8.16%, beating the S&P 500 by nearly 200 basis points.
The last week’s flows into European equity funds were the largest in over a year. “Our fund flow data shows that institutional investors have been buying into the equities rally that started in the middle of last year for over three months now,” says EPFR Global Research Director Cameron Brandt. “Retail investors are still keeping their distance.”
Developed market equity funds boosted their year-to-date inflow total by another $7 billion during the week ending Feb. 22 despite polls in France favoring National Front Candidate Marine Le Pen. Political risk remains the biggest reason retail investors are reluctant to buy European securities, and perhaps one of the reasons why investment advisors are not pushing those funds onto their clients.
In The Netherlands, the nationalist Party for Freedom is leading in the polls with less than three weeks to go before election day. France’s political outlook looks abysmal, with business-as-usual Francois Hollande’s approval rating in the single digits. Investors are most bullish on Spain, however. Inflows hit a 22-week high but the iShares MSCI Spain (EWP 32,17 -0,19 -0,59%) fund is pretty much a laggard. It’s tracking FTSE Europe over the last 12 months, but is down in comparison year-to-date.
European bond flows saw another billion dollars pulled from them last week as investors give up on negative yield.
Meanwhile in the U.S., investors are largely buyers of commodity funds and financial sector funds. Two ETFs in this space are the iShares S&P GSCI Commodity Index (GSG 22,77 +0,17 +0,75%) and the Vanguard Financials (VFH 99,83 -1,13 -1,12%). Gold is the bulk of the commodity inflow, however, which is why GSG is down in the last five days but the SPDR Gold (GLD 211,52 -1,22 -0,57%) ETF is up.
Domestic investors have been sellers of healthcare funds (XLV 141,95 -2,08 -1,44%) and utility funds (XLU 64,97 -0,13 -0,20%) this past week.