Money market funds saw net inflows for the first time since January on uncertainty about euro zone stability, while global bond funds had net outflows for the first time in more than a year, EPFR Global said on Friday.
Investors also chased gold and other havens in the week ended May 12 after a sharp a spike in market volatility.
Commodity sector funds absorbed a record $3.1 billion, an eighth week of inflows that have driven year-to-date gains to more than $5 billion and helped pushed spot gold prices <XAU=> to record highs.
U.S. equity funds absorbed a 19-week high of $14 billion, primarily due to flows into the SPDR S&P 500 ETF Trust and the iShares Russell 2000 Index Fund, without which the fund group would have seen outflows.
The period covered by the data was marked initially by panic that a sharp loss of confidence in Greek government bonds would spread to other heavily indebted European countries and threaten the euro <EUR=> currency.
However, a $1 trillion EU-IMF emergency rescue package and government bond purchases by the European Central Bank have calmed market nerves somewhat this week, though the euro <EUR=> remains under pressure. [MKTS/GLOB]
In the week to Thursday, European stocks <.FTEU3> were up 6.6 percent, outperforming U.S. and Japanese stocks <.SPX><.N225>. Emerging market equities were up 4.9 percent <.MSCIEF>.
GLOBAL BOND FUNDS
The bond fund group saw a 54-week streak of inflows come to an end. Within these funds, developed Europe accounts for a third of the average portfolio.
Indeed, Kokusai Asset Management's Global Sovereign fund, the world's second-largest bond fund, slashed its exposure to the euro by 4.8 percentage points since the end of March to 29.6 percent as of Monday. [ID:nTOE64C07N]
Investors took a net $2 billion out of high-yield bond funds and delivered a slim $22 million to emerging markets bond funds. Inflows to the latter group had averaged $1 billion a week in April.
Money market funds, a cash equivalent, saw net inflows of $23.5 billion. For the year though, outflows stand at a hefty $388.5 billion.
DEVELOPED EQUITY MARKET FUNDS
"Two of the five major developed market fund groups recorded strong inflows during the second week of May. But the money flowed almost exclusively into ETFs, suggesting that investors are keeping their options open and, in some cases, taking short positions," EPFR said, referring to exchange-traded funds.
Europe-focused equity funds actually saw record net inflows of $4.7 billion, though the majority of that headed to German ETFs in an apparent flight to quality.
The inflows to U.S. equity funds mean the group is positive year-to-date for the first time since the first week of January 2009.
"It may be a flight to quality within the Eurozone," noted EPFR Global Senior Analyst Cameron Brandt. "But past flows into these ETFs dedicated to Germany have tended to be short-term position that reverse themselves, often within a couple of weeks."
EMERGING MARKET EQUITY FUNDS
This fund group suffered outflows of $2.1 billion.
Redemptions from Latin America Equity Funds climbed to an 85-week high, EMEA Equity Funds had net outflows of $350 million and Asia ex-Japan Equity Funds had their worst week in well over a year.
Africa equity funds, perhaps reflecting diversification needs, had a 36th consecutive week of inflows, bringing year-to-date inflows to $400 million.
Equity funds focused on the fast growing BRIC countries (Brazil, Russia, India and China) had outflows of $133 million, the largest since October 2008.
