Weekly Insights From The FNArena News Desk 19/03/19

One of the curious characteristics of the 2019 rally in global equities is that while most commentators have been zooming in on the AbFab V-shaped performance against all odds, in the background investors have been withdrawing their money, leading to quite large net outflows which tend to indicate widespread unease and discomfort rather than the bullish view and optimism one might infer from face value index performances.

This observation has led to at least one strategist (Citi’s Robert Buckland) to conclude “Buybacks, not investor inflows, now drive the US market“.

While part of the global money flows can be explained by investors preferencing passive ETFs over active fund managers (unsurprisingly given many of the latter’s dismal performances in 2018), outside of the US money continues to flow out of markets in Japan, China and the rest of Asia, as well as away from equities in the UK and Europe.

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