Courtesy of UBS’ global macro strategy team comes this excellent map that reveals fund flows from exchange traded stock funds (ETFs) since the end of May.
US ETFs saw inflows of $2.3 billion due to lowered rate hike expectations and a better economic growth prospects while Japan also had attracted $800 million in funds due to purchases made by the Bank of Japan as part of its quantitative and qualitative easing (QQE) program.
On the other side of the equation, there were substantial outflows from European stocks, particularly in Germany which recorded outflows of $1.2 billion.
Ramin Nakisa, strategist at UBS, put the outflows down to earnings downgrades, possible EU structural reforms and Fed rate hike prospects.
UK stock ETFs, despite the looming threat of a potential UK “Brexit” from the European Union, recorded net inflows of 0.9% for the month, although there was a substantial 3.5% decline in UK gilt ETFs over the same period.