Europe-focused equity funds posted biggest outflows since Oct ’23 last week By Investing.com

Europe-focused equity funds saw their biggest outflows in nearly a year, according to a recent Bank of America note.

Investors pulled a substantial $2.4 billion from these funds, marking the 12th straight week of outflows and the most significant single-week withdrawal since October 2023, the bank said.

BofA explained that this brings year-to-date outflows from Europe-focused equity funds to $37.4 billion.

Additionally, the bulk of recent outflows are said to have come from active funds, which saw $1.66 billion in withdrawals – the most in 17 weeks – while passive funds saw an outflow of 0 .73 billion dollars, just the second in the past six weeks.

Bank of America noted that while value stocks and Switzerland drew modest inflows of $0.16 billion and $0.13 billion, respectively, other areas struggled.

Financials, UK and growth stocks were the worst hit, with outflows of $0.62bn, $0.54bn and $0.26bn respectively. Notably, no sector failed to record inflows during the week.

Bank of America’s analysis also highlighted that their stylistic cycle pattern remains in the “recovery” phase from August 2024, but the European macro composite indicator was down.

They say this decline could move the market into a “recession” phase next month if the trend continues.

The bank says the trends point to growing investor caution towards Europe-focused funds, reflecting wider concerns about economic conditions in the region.

With no sector showing continued significant flows and withdrawals, BofA believes market sentiment appears to be moving away from Europe as uncertainties loom.