Investors re-embraced European equities last month but a real reflection of increased risk tolerance will come if they are drawn back into emerging markets. Cherry Reynard reports.
The Federal Reserve surprised bond bears in October by suggesting that quantitative easing (QE) would continue into 2014. This prompted some hasty covering of positions and reversed a long-running sell-off in bond markets. Nevertheless, equities were still the preferred asset class, with investors moving back into unloved European markets in the hope of an economic recovery. EPFR data illustrated the trend away from bond funds at the start of October. Investors had already pulled $61.5bn from the asset class worldwide in the third quarter, the highest figure since EPFR started track...
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