Monthly Market Report - September 2014

1st September 2014

With commentary from David Stevenson

August has been an exceptionally quiet month - thus the brevity of this update. Overall, I think it's fair to say that investors remain cautious in attitude, yet on closer inspection most investors are actually behaving in a rather bullish manner. One indicator of this willingness to put money to work comes from tracking fund flows, especially for exchange traded funds - these numbers tell us how investors are actually allocating within their portfolios.
Last week, for instance, BlackRock put out one of their definitive reports on ETP fund flows and concluded both Emerging Market equities and Japanese stocks were trending higher while funds continued to also flow into developed world equities generally and Europe in particular. The chart below from BlackRock very succinctly demonstrates that mainstream equities continue to attract substantial inflows.

According to BlackRock "Inflows were $3.9bn and year-to-date trail only US equity among developed markets exposures. ETPs with US large cap equity exposure led all categories globally with $13.9bn even though valuations in the US are less favourable than elsewhere in the developed world". So, no bear market in sight if we are to believe these numbers.

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