Flows into Equity Funds jumped to a 21-week high during the first week of February, with over $35 billion committed to US Equity Funds, as investors responded to the cheaper valuations on offer after January’s sell-off. But the fear that the Federal Reserve could hike rates at each of their remaining 2022 policy meetings, which triggered the recent declines in US equity markets, continued to chill appetite for bonds. The Bond Funds tracked by EPFR posted their fifth consecutive outflow, a run that has seen over $35 billion redeemed since the second week of January.
With major central banks responding to rising inflation, investor focus shifted during the third week of December to the Covid-19 pandemic’s latest iteration and the measures being taken to contain it. Those measures, self-imposed and mandated, promise to dent consumer and business confidence going into the New Year and weighed on flows to many EPFR-tracked fund groups.