Weekly Regional Country Fund Flows
A little time out
Fund flows into global equities were virtually flat at US$875m for the week ended 21 March. Even ETF flows fell to US$591m from US$11.1b a week earlier, whilenon-ETF flows turned marginally positive at US$284m.
Investors remained net sellers of Asia ex-Japan equities, though it fell to US$36m, on the back of better inflows into Thailand, Indonesia, the Philippines and Vietnam. On a sector basis, telecoms, utilities, energy and financials recorded inflows.
We believe that the short-term high beta trade is cooling off as investors come to the conclusion that the Fed is unlikely to proceed with QE3 in the near future. Inflationary expectations
have risen, the US five-year breakeven inflation rate has reached 2.06%, up from 1.59% at the end of last year.
Global equity markets are likely biased to the downside in the near term; investors will probably lock in profits before the start of the 1Q12 earnings season in the US.
below: Weekly Country Flows (click to enlarge)