Central bank decision prompts exit from bonds
Allocators rotated out of fixed income and into equity in November in anticipation of changes to monetary policy this month, according to fund data house EPFR.
For the week ending 3 November, equity funds saw collective inflows of $26 billion while bonds saw $7.9 billion.
This was a change from the third quarter to 30 September when bond funds saw an average weekly inflow of $16 billion versus $14 billion for equity funds.
EPFR attributed this to the likely changes to monetary policy which were coming up from central banks.
“Ahead of the US Federal Reserve spelling out the tapering of its current asset purchasing program, at the rate of $15 billion a month, and the Bank of England’s Nov. 4 policy meeting, flows continued to rotate from fixed income to equity fund groups,” it said.
Equity funds with a socially responsible or environmental, social and governance mandate also saw their largest weekly inflows since July, a likely result of the United Nations Climate Change conference beginning this month.
Year to date, these funds had taken twice as much money, in dollar terms, compared to their non-SRI/environmental, social and governance (ESG) counterparts.
AUTHOR
Laura Dew
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