Fed's stance helps risk appetite return
From News Jan 30 2012 BY: Esther Armstrong
, Senior Reporter
, Portfolio Adviser
Popularity of emerging markets equity and bond funds surged last week after the Federal Reserve in the US signalled it would keep interest rates at rock-bottom for another three years.
Inflows into EPFR Global-tracked EM funds were at their highest levels since Q2 last year and financial sector funds saw their biggest weekly inflows since the fourth quarter of 2010.
Overall, EPFR Global-tracked equity funds absorbed $8.62bn in the week to 25 January, with emerging markets representing nearly a half of that total.
Meanwhile, bond funds took in $6.08bn and money market funds saw outflows of $7bn, another indication risk appetite is returning to markets.
This was also shown by the lowest level of redemptions from equity funds in over six months.