Equity fund inflows at four-year high Investors have poured money back into global stock markets as aggressive central bank action has stoked risk appetite. Weekly inflows into equity funds have hit a four-year high of $17bn. The US Federal Reserve, the European Central Bank and the Bank of Japan have all unveiled schemes to ease financial tensions and buttress economic growth this month. Despite the subsequent rally now showing signs of fading in some markets, investors have reacted bullishly to the decisiveness of monetary policy makers, withdrawing from "haven" assets and moving into riskier funds. In the week ending September 19, investors withdrew $17bn from safer money market funds and placed an equal amount in equity funds, and a further $6.3bn into bond funds, according to EPFR Global, a data provider. "The recent wave of global central bank easing - with the BoJ the latest to join the party - ought to give markets greater confidence that there is a determined monetary policy reaction to the recent signs of weaker business activity," said Julian Callow of Barclays in a note. Emerging markets were arguably the biggest winners, with $4.3bn of inflows into dedicated equity funds over the five-day period, the most in 32 weeks. Emerging market bond funds extended their inflow streak to 15 weeks and $11.4bn. Europe-dedicated equity funds also saw increased investor interest, with inflows reaching the highest level in 19 weeks, but this was dwarfed by the surge of money placed in equity funds with a global remit, which hit a 52-week peak. As a result, the S&P 500 index is near its highest level since early 2008, while the benchmark European share index has gained 3.4 per cent this month to trade within reach of a one-year high. The Spanish Ibex index has been one of the prime beneficiaries, jumping more than 10 per cent so far in September. Yet many investors and analysts are sceptical that the current central bank-inspired rally can last, given the murky global economic outlook. Yet, fundamentals continue to weaken," Morgan Stanley analysts said in a note. We believe fundamentals ultimately trump central bank policy. Citigroup points out that corporate profits have begun to slow once more after the post-crisis recovery, particularly in continental Europe and Japan. "While central banks have supported risk appetites, we are not sure they will be able to support corporate profits," the bank's strategists note. Indeed, overall interest in equities remains limp compared with the pre-crisis heyday, as investors have feared that the global economic recovery will continue to be slow and prone to stalling. Equity funds tracked by EPFR registered net outflows of $178.3bn last year, even as bond funds notched up almost $100bn of fresh investment.