Investors are fleeing European stocks at a pace not seen since the global financial crisis, says HSBC.
In a report released on Wednesday, the bank’s global equity strategy team, Amit Shrivastava, Robert Parkes and Eshan Raka, note that “prevailing uncertainty in Europe continues to drive investors away from the region… with outflows now running into their 26th week, now the joint longest streak of redemptions from European equities”.
Here’s a chart from the bank, showing cumulative fund flows to European, emerging markets, developed markets in Asia and North American stock funds.
“Post Brexit, European equities have seen cumulative outflow of $US34.7 billion, which is ~2.1% of total assets under management (AUM),” the trio write.
Already at par with outflows seen during the 2008 financial crisis, they suggest that “in the absence of any strong short-term positive indicators, we do not see this trend reversing anytime soon.”
The biggest beneficiary from the mass exodus from Europe has been emerging markets, says HSBC, with net inflows to stocks in this region totaling 1.2% of funds under management.