Fund Management

Nervous Investors Retreat From European Mutual Funds

Farva Kaukab 22 March 2016

Nervous Investors Retreat From European Mutual Funds

Fresh data showed investors in mutual funds chose safety over risk in February.

Data from Europe’s mutual funds sector showed investors pulling out of investments in February. Luxembourg, a prominent domicile for investments, suffered the largest monthly outflow with a net withdrawal of -€18.3 billion (-$21 billion).

Only nine out of 34 markets showed net inflows. The country ranking was topped by Switzerland (€1.5 billion) and Ireland (€1.2 billion).

The continent's mutual fund industry saw an outflow of -€24.5 billion during February, according to a report by Thomson Reuters.

Other recent surveys, such as the monthly barometer of sentiment by Bank of America Merrill Lynch, have shown investors reducing their risk appetite and pulling money out of the equity market, in preference for supposedly safer areas.

Bond funds (-€11.5 billion) were the asset class with the highest net outflows. Equity funds suffered slightly less (-€8.4 billion outflows), as did mixed-asset funds (-€5.8 billion). On the other hand, alternative UCITS funds (€1.1 billion) saw net inflows, as did real estate products (€0.6 billion) and commodity funds (€0.3 billion).

After net inflows of €13.6 billion for January, money market products also seemed to be the investment vehicles of choice for investors in February. They enjoyed inflows of €2.8 billion over the month.

This flow pattern drove the overall fund flows in mutual funds in Europe to -€30.0 billion for 2016 so far.

BlackRock, with net sales of €5.4 billion, was the best-selling fund group for February overall, ahead of Generali (€2.9 billion) and Legal & General (€2.7 billion).

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