By Carl Delfeld of the Chartwell ETF Advisor
While many exchange-traded funds are suffering declines, net investment flows by the world's large equity managers tracked by EPFR Global are leading to the building up of sizable cash positions.
EPFR comments that with sub-prime and global credit fears being fueled by almost daily news of fresh write-downs in the financial sector and evidence mounting that the US economy will slow going into next year, investors retreated from equity funds during the second week of November and shift into the relative safety of Money Market Funds.
All of the major EPFR Global-tracked equity fund and ETF groups posted net outflows for the week ending November 14, with $5.58 billion pulled out of emerging markets equity funds and $5.07 billion out of funds geared primarily to developed markets. Money Market Funds, meanwhile, absorbed $10.1 billion, bringing net inflows since the beginning of August over the $100 billion mark.
Global equity managers did put fresh money into Germany and South Korea Country Funds and injected over $2 billion into Financial Sector Funds and ETFs. During the second week of November they pumped $2.47 billion into Financial Sector Funds – nearly all of that money by way of ETFs – which took year-to-date flows back into positive territory. They also moved aggressively back into US Small Cap equity. Latin American funds and ETFs are year-to-date still sitting on a net gain of 60.76%.
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