UK retail investors pulled a record amount from fixed income funds last month as yields spiked on fears of an end to US QE, latest IMA figures reveal.
US equities can benefit from the end of QE and post an annualised return of 10% by end-2014, according to AXA IM head of research Eric Chaney.
Sterling and gilt yields have jumped this morning after the latest Monetary Policy Committee minutes revealed Mark Carney and all other MPC members voted against more QE in July.
The Financial Conduct Authority (FCA) is looking into claims traders intentionally pushed up the price of government bonds before attempting to sell them to the Bank of England (BoE) in 2011.
The recent hiccup in investor sentiment should not develop into anything more dramatic, writes Rob Burdett and Gary Potter, co-heads of multi-manager at F&C investments.
The Bank of England has said market expectations of future rate rises are "not warranted", sparking a drop in sterling and a 50 point jump in the FTSE 100.
A leading member of the US Federal Reserve has tried to calm markets by stressing plans to start tapering its QE programme depend on the economy recovering.