Investor gloom waning, stock funds gain: EPFR

By Daniel Bases

NEW YORK (Reuters) - Investors poured fresh cash into equity funds focused on China and Germany in the week ended April 23 and pulled relatively modest amounts of cash from money market funds, data from fund tracker EPFR Global showed on Friday.

Hopes that the financial crisis, which has gripped global markets for the last nine months, is showing signs of loosening helped pull some cash back into stocks and bonds.

"It was a positive week, no arguing with that," said Cameron Brandt, global markets analyst at Boston-based EPFR.

"It was a combination of things. The latest hot theory is that we are at or close to the bottom and there are continuing signals from U.S. monetary authorities that they will do what it takes," he said.

There is a growing consensus in the market that the U.S. Federal Reserve will lower the benchmark fed funds interest rate at least one more time, probably by a quarter of a percentage point, when it meets next week.

Money market funds posted net redemptions of $1.1 billion in the latest week while global bond funds, another safe haven, had outflows of $402 million.

"There were modest outflows from money market funds, but there does seem to be a change in the pattern from relentless inflows to a mixture of in and out. I don't know if it is an inflection point, but it raises the question. My sense is it is a little too early, but people are wondering," Brandt said.

Looking at geographic sectors, German equity funds had inflows of $3.9 billion, giving Western Europe funds overall a net inflow of $2.9 billion.