Billion-Dollar Fund Flows Show Europe Investors Inured To Swings
Wild rallies and heavy selloffs are no deterrent to investors pumping record money into European equities.
Daily swings in the Stoxx Europe 600 Index have averaged 1.1 percent in August as companies go up and down in lockstep more than any time since the depth of the sovereign-debt crisis. Yet confidence that earnings growth will come through has made investors look past the volatility and pour $1.3 billion into an exchange-traded fund tracking the shares in the past month, including record inflows last week.
?Markets have had a lot of developments to digest — good news in Greece, bad news from China, and then earnings season giving us surprises in both directions,? said Alex Scott, who helps oversee about $14 billion as Seven Investment Management?s deputy chief investment officer. ?Risk appetites have adjusted. With an earnings recovery unfolding, European equities offer the best hunting ground for investors seeking value.?
Concern that exporters will suffer from China?s currency devaluation hit equities earlier this week, just after fading worries that Greece will leave the euro propelled the Stoxx 600 to its biggest nine-day jump since 2011 last month. With companies such as Nestle SA beating sales estimates, the gauge has managed to remain above its low from July 7.
The Stoxx 600 climbed 0.4 percent at 9:21 a.m. in London.