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March 12, 2012 at 08:14 AM
Overall, equity funds tracked by EPFR Global posted outflows of $4.3 billion for the week ending March 7. Bond funds took in a net $6.9 billion, as money-market funds had inflows of $5.9 billion.
Despite strong U.S. stock-market performance, retail investors continue to be attracted by dividend-paying stocks. They have committed money to dividend-equity funds during 57 of the 62 weeks since the start of last year, according to EPFR Global.
The Dow Jones index has risen roughly 6% in 2012 through March 9, and the S&P 500 improved about 9%. The Nasdaq has ticked up nearly 15%, according to data compiled by T. Rowe Price. Still, the markets did have their biggest single-day loss in three months on March 6.
As for the developed markets overall, U.S.-equity funds led the way in outflows in dollar terms, with over $5 billion flowing out. Year-to-date inflows, which peaked in early February at $12.3 billion, fell below the $1 billion mark. The bulk of the redemptions came from small- and large-cap ETFs.
Canada-themes funds, however, had their best week in 2012 as oil prices remained high. High energy prices hurt investor sentiment towards Japan, prompting them to pull $443 million from equity funds focused on that country: In early 2012, net outflows now total $1.6 billion, despite a fund-group return of 12% so far this year.
Emerging Markets
At the same time, though, investors continued to move into riskier assets in early March, reports EPFR Global. They gobbled up emerging-market bond and equity funds, while also moving into high-yield and mortgage-back products. In less-risky investments, investors pulled funds from European fund groups, though retail redemptions did fall to its lowest level since mid-2Q11.
Key ETFs with a focus on India are up over 21% year to date. Their Brazilian and Russian counterparts have risen 17% and 23% respectively.
Emerging-market bond funds and global emerging-market equity funds took in over $1 billion for the week ending March 7, the research group says. In addition, mortgage-backed bond funds hit the one-year market for inflows, as high-yield bond funds experienced year-to-date inflows that were nearly three times that of their full-year total for 2011.
