Stocks Lure Most Inflows This Year on Fed Easing, Citigroup Says

Global equity funds lured the largest weekly inflows this year after the Federal Reserve and the European Central Bank announced monetary stimulus measures, according to Citigroup Inc.

“The increased exposure is driven by liquidity injection by central banks,” Yue-Hin Pong, an analyst at the brokerage, wrote in an e-mail today. Equity funds attracted $17 billion in the week ended Sept. 19, Pong wrote in a report with Markus Rosgen, citing data compiled by EPFR Global. Emerging-equity funds drew $3.2 billion, while Latin America funds lured $846 million, the most since 2010, according to the report.

The Federal Reserve said last week it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing. European Central Bank President Mario Draghi said on Sept. 6 policy makers agreed to an unlimited bond-purchase program as they try to regain control of interest rates in the euro area.

“We expect some more switching to equities after its long underperformance,” Citigroup’s Pong wrote in the e-mail.

Latin American funds were boosted by flows into Brazilian exchange-traded funds, the analyst wrote. Asian-focused funds attracted $219 million, while China funds lured $265 million, according to the Citigroup report.

--Zhang Shidong. With assistance from Weiyi Lim in Singapore. Editors: Richard Frost, Darren Boey

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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