Since the beginning of the year, nearly $30 billion has been taken out of European stock funds.
Fund flow data from a research note by Bank of America analysts showed that money had been taken out of European stock funds for the past 16 weeks; Bloomberg reported this on Friday.
Since the beginning of the year, $27 billion worth of money has been taken out of the market, according to the study. Of the major regions, $4.6 billion has been taken out of Europe last week.
Analysts think the area could have done better because investors are becoming more interested in high-capitalization tech stocks, which are more common in the US. Currently, the Nasdaq index of US high-tech companies is up 32%; this is the second-best six-month since 1999 when it went up 61%.
In a note to Bloomberg, Barclays analyst Emmanuel Cau said, “Tech exposure is driving regional equity flows again, which is good for US stocks and the dollar.” He said Europe was the only significant area where people left in June.
“Conversely, US investors have started selling European stocks for the first time this year. Weaker-than-expected economic data is causing more money to leave the area,” Cau said.
Analysts at Morgan Stanley said last month that European stocks would drop by 10% this summer because of a slowdown in economic growth caused by ongoing monetary tightening, falling liquidity, and a stronger dollar.
