U.S. investors cut their exposure to European shares for a third straight week in the seven days to April 3, the longest negative streak since June 2012, while the chased a rally among domestic equities.
A Lipper poll of 90 U.S.-domiciled funds invested in European shares reported net investor outflows of $88.7 million, taking total redemptions for the past three weeks to $441.7 million.
While the pace of outflows more than halved compared to the previous week, it still marked a contrast to the net new money raked in by U.S. domestic equity funds.
Sentiment towards European shares has been deteriorating since mid-March as Cyprus became engulfed by a funding crisis, while the U.S. S&P 500 scaled new record highs, luring investors who had missed out on a rally in the first quarter.
"This is new money coming (into U.S. equities) from (retail) investors," says Tom Roseen, head of research services at Lipper. "They thought they missed the boat and they're trying to get back in."
The redemptions from funds invested in Europe were driven by outflows from Exchange Traded Funds, which are generally believed to represent the behaviour of institutional investors and tend to react to more quickly to good and bad news.
Mutual funds, which are thought to represent the retail investor, suffered relatively smaller redemptions.
But European share prices rebounded during the week, helping the value of total assets held by the 90 funds in Lipper's poll increase 1.3 percent to $16 billion.
Reuters messaging rm://francesco.canepa.thomsonreuters.com@reuters.net
