Weekly figures from US-based EPFR Global shows that investors poured the highest levels of cash into money market funds for 78 weeks, suggesting they are nervous about the outlook for equities and other risky assets.

Money market and US bond funds are seeing big inflows as most equity fund groups struggled to attract significant amounts of fresh money, the fund tracker said.

Overall, bond funds tracked by the organisation absorbed another $3.64 billion and money market funds a further $33.5 billion, while equity funds posted combined net redemptions of $11.25 billion.

When the financial crisis erupted in the autumn of 2008, wealth management clients piled into low-margin, money market products and switched from equities, a process that slammed the profit margins of private banks. That cautious investor stance remains, even though it has become less pronounced since stocks rallied in 2009. 

Looking at the global economic picture, the fund tracker said some “encouraging assessments from both the IMF and Australia’s central bank, plus some optimism that the US and Europe will not suffer a double-dip recession, helped emerging markets equities regain some lost ground into the second week in July."

Two of the four major EPFR Global-tracked emerging markets fund groups managed to post inflows during the week ending 7 July, with GEM Equity Funds taking in $517 million and Asia ex-Japan Equity Funds $124 million, while EMEA and Latin America Funds recorded modest outflows.