Bargain hunters put cash in western Europe, Japan-EPFR

By Daniel Bases

NEW YORK, Feb 4 (BestGrowthStock) – Investors hunted for bargains
amid the market turmoil, pulling money off the sidelines in the
week ended Feb. 3 and putting it to work in U.S. and global
debt funds as well as beaten-up equities from western Europe
and Japan, EPFR Global said on Thursday.

The latest report showed a $9.1 billion net outflow of cash
from money market mutual funds, the Boston-based fund tracker
said in a statement.

This comes even as uncertainty over the strength of the
global economic recovery increases and a rising tide of worry
over government finances in Greece, Portugal, Spain, Italy and
Ireland.

Investors have pulled nearly $80 billion out of money
market funds, considered safe havens for investors unsure of
where to place their bets.

Dedicated long-only emerging market equity funds had their
worst week in 24, seeing investors pull a net $1.62 billion out
of the sector, a second consecutive week of redemptions.

“Overall, bond funds tracked weekly by EPFR Global with
$1.1 trillion in assets attracted another $4.6 billion of net
inflows while the equity funds, with $3.1 trillion in assets,
suffered outflows of $981 million,” EPFR’s statement said.

BARGAIN HUNTING

The bargain hunting was seen especially strong in western
Europe where investors pumped in a net $861 million, with
Britain taking the lion’s share with a net inflow of $587
billion.

After hitting a 16 month high on Jan. 19, the pan-European
FTSEurofirst 300 index (.FTEU3: ) of top shares fell 5.22 percent
through the prior EPFR reporting period ended Jan. 27. The
index recovered 0.71 percent in the week ended Feb. 3.

Over the same dates, Britain’s benchmark FTSE 100 index
(.FTSE: ) lost 5.37 percent, recovering 0.63 percent through
EPFR’s latest reporting period.

A similar pattern was seen in Japan-focused funds, which in
the latest week took in a net $165.6 million. The Nikkei-225
index (.N225: ) gained 1.7 percent during that period.

Japanese funds extended their inflow streak to six weeks
“as investors shrugged off Toyota’s massive recalls, signs that
deflation is strengthening its grip on Japan’s domestic economy
and fresh warnings from ratings agencies about the unchecked
growth of the country’s public debt,” EPFR said.

Asia ex-Japan equity funds had net outflows of $516.5
million.

EPFR said the pressure on this group was compounded by the
diplomatic row over the U.S. arms sale to Taiwan, which raised
the specter of trade disputes and sanctions with China.

China equity funds posted outflows for the fifth time in
the past six weeks, losing $162.7 million, but Taiwan equity
funds had their best week since early June.

India’s equity funds had $180.4 million in net withdrawals,
its worst week in the last 68 weeks.

U.S. equity funds had net outflows of $305.2 million and
Latin America had $175.7 million in redemptions.

SECTOR FUNDS

Financial sector funds took in a net $423.8 million despite
proposals to increase both taxes and regulations on U.S. banks.

It appears the expected delays and changes to an overhaul
of the U.S. healthcare system benefited this sector, which took
in a net $239 million in the latest week.

Investors kept nibbling at real estate, pumping a net
$179.5 million into this area, replacing the energy sector
funds group as the year-to-date inflow leader. Energy funds had
net redemptions of $164.2 million.

Technology and consumer goods sector funds each had inflows
over $130 million.

DEBT

The mixed performance for equity funds and the search for
safety did lead cash to bond funds. U.S. bond funds took in a
net $2.25 billion, extending the inflow streak to 57 weeks.

Global bonds funds took in $1.6 billion. High-yield bond
funds benefited from central banks holding interest rates
steady, receiving a net inflow of $335 million.

Emerging market bond funds took in $406 million in fresh
cash with local currency beating hard-currency nearly 2:1.

Stock Market Research Tools

(Editing by Gary Hill)

Bargain hunters put cash in western Europe, Japan-EPFR