Investors Pull $7.1 Billion From Stock Funds Worldwide, Buy Emerging Bonds

[marmar]

Investors Pull $7.1 Billion From Stock Funds Globally (Update3)
By Shiyin Chen and David Yong


Aug. 27 (Bloomberg) -- Investors withdrew a net $7.1 billion from equity funds tracked worldwide in the week to Aug. 25 and put some $5.2 billion into bonds amid concern economies in the U.S. and Europe are losing momentum, EPFR Global said.

A net $5.4 billion was redeemed from U.S. stock funds, while inflows into emerging markets were the lowest in 13 weeks, EPFR said in an e-mailed statement. Developing-nation bond funds took in $1 billion, on course for a record-setting year, while U.S. bond funds drew $2.5 billion, according to the Cambridge, Massachusetts-based research firm.

The MSCI AC World Index, tracking developed and emerging markets, has dropped 4.2 percent this month after government data signaled a slowdown in the U.S., China and Japan and Standard & Poor’s lowered Ireland’s credit rating. Concern the global rebound will falter is driving investors to the relative safety of bonds, sending yields on two-year treasuries and German 30-year government securities to a record low this week.

“The weaker the numbers come in, particularly in housing, the higher the probability becomes” for a second recession in the U.S., David Wyss, S&P’s chief economist, said in a Bloomberg Television interview in Hong Kong. “While you’ve got stellar German growth, the rest of Europe is looking pretty sick.” .............(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20603037&sid=aPRxN9th86fU