Investors return to funds as sentiment improves

Improving economic data led investors to make a return to funds last week, according to latest figures from data provider EPFR Global.

In the week ending June 2, there were net inflows of $1.48 billion into equity funds tracked by EPFR Global. This represents a significant turnaround on the preceding week, in which equity funds saw net outflows of $20 billion.

Meanwhile, bond funds recorded net inflows of  $2.69 billion.

The EPFR Global data, which covers fund firms worldwide running assets in excess of $13 trillion, showed that money market funds bore the brunt of a turnaround in investor sentiment, as the sector saw all of the previous week's $7.8 billion inflow exit.

High yield bond funds also saw money leave the sector, while commodity sector funds posted their first weekly outflows since mid-March. Technology funds' popularity continues to wane, as they reported their fourth straight weeks of outflows.

However, European equity funds, global bond funds, US bond funds and global emerging market equity funds all recorded inflows of more than $1 billion during the week.

US and Pacific equity funds, as well as emerging market debt funds, also saw flows turn back in their favour.

EPFR Global puts the pick-up in fund flows down to investors believing certain sectors to have been oversold following the crisis of confidence triggered by Greece’s debt problems, the BP oil spill, weaker Chinese data and rising tensions on the Korean peninsula.