Europe-focused equity funds see largest outflow in five weeks

Investing.com -- Europe-focused equity funds experienced their largest outflow in five weeks, Bank of America revealed in a new report.

The note highlights a third consecutive outflow totaling $0.96 billion, marking the 32nd outflow of 2024. Year-to-date, the outflows now amount to $40 billion.

Active funds have been hit the hardest, with a $1.7 billion outflow, the largest in 22 weeks. In contrast, passive funds saw inflows of $0.73 billion.

BofA notes that outflows from active funds have reached $51 billion year-to-date, while passive funds have managed to attract $11 billion in inflows.

The report also highlights specific trends within European markets. Size stocks saw the largest inflows at $0.76 billion, followed by Switzerland at $0.03 billion, and Utilities with a minimal inflow of $0.0003 billion. On the other hand, the UK, Financials, and Growth stocks posted the largest outflows, with $0.56 billion, $0.28 billion, and $0.27 billion, respectively.

In terms of market performance, Growth stocks have been leading in September, with High vs Low Growth topping style gains at 5.5%, BofA notes.

It also points out that “Rising vs Falling Momentum” has outperformed in 17 out of 20 sectors and seven out of eight countries, suggesting that momentum strategies have been highly successful. However, High vs Low Quality stocks have struggled, losing 6.2% and underperforming in the majority of sectors and countries.

Global markets are bracing for the Federal Reserve’s interest rate cut on Wednesday, the first one in years.

Economists at BofA expect the U.S. central bank to reduce rates by 25 basis points (bp) this week, followed by a series of 25 bp cuts over the next five meetings.

Source: Investing.com