Where did the smart money go in December?

SMART MONEY

In the euphoria of the early 2013 rally, it is easy to forget the grim shadow cast by the US fiscal cliff at the end of 2012.

However, equities managed to gather momentum in December in spite of the continued uncertainty on US tax rises and spending cuts. Meanwhile fixed income was beginning to look pricey, even for the most safety conscious investors, and many were starting to reconsider their views on the asset class, a trend that has accelerated at the start of 2013. Investors’ year-long preference for fixed interest was certainly over by the end of 2012. According to figures from EPFR Global, bond funds saw outflows of $4.1bn in the third week of December - their worst performance in 18 months. Money ...