Investors Put Trust Back in Equities

Globally, year-to-date cash contributions to equity and mixed funds through April 2011 surpassed fixed income for the first time since the financial crisis.

The data was compiled in a monthly global flow review from Strategic Insight, an Asset International company.

“The net cash flow data – equity funds gathered $110 billion through April, mixed funds $30 billion, bond funds $100 billion – confirms a slowly shifting trend from global and other fixed income themes to selected equity categories, demonstrating investors’ desire for higher equity allocations to meet their long-term financial objectives,” said Daniel Enskat, Head of Global Consulting for Strategic Insight.  

Beyond the slow shift back to equities overall, “significant progress continues to be made in emerging markets, particularly Brazil.  Through Q1 2011, the market captured $20 billion in flows or a remarkable 10% of worldwide cash contributions,” added Enskat. Net flow gains have pushed the country’s regional market share to 90%.   

Though Brazil dominates the region, Enskat noted that “there is a growing set of opportunities for cross-border fund managers across Latin America as a whole, especially in smaller countries such as Chile, Peru and Colombia, that are leading the way in cross-border UCITS fund distribution.”    

He added that “large distributors in Brazil and Mexico are showing a greater willingness to work with third-party fund managers of late.  Many international fund companies such as Investec, Blackrock and MFS are building up their regional presence, and firms such as Franklin Templeton already have an established business south of the border.”  

The report, “Equities, Brazil and Emerging Market Bridges,” features additional details on fund flow trends globally as well as examples of local and cross-border managers capitalizing on the business opportunities in Brazil and beyond.  

More information is at