August fund-flows: Big surprise for mixed-asset

Detlef Glow (pictured), head of research EMEA at Thomson Reuters Lipper analyses the latest fund flow trends in Europe.

Since mixed-asset products had been the darlings of European investors for quite a while, it was a big surprise to see that investors pulled money out of mixed-asset funds (-€0.3 bn) during August. That said, not only mixed-asset funds faced outflows. Equity funds (-€23.1 bn) suffered the highest estimated net outflows for August, bettered somewhat by bond funds (- €18.4 bn). On the other side of the table alternative/hedge products (+€3.4 bn), “other” funds (+€1.0 bn), and commodity funds (+€0.5 bn) as well as real estate products (+€0.4 bn) enjoyed net inflows. These flows added up to estimated net outflows of €36.5 bn from long-term investment funds for August.

Despite the outflows for August, the European investment industry still enjoyed healthy estimated net inflows of €256.9 bn into long-term investment funds for the year.

Money Market Products

While the major asset types faced outflows for August, money market products—an asset class that can be seen as a safe haven—enjoyed the highest net inflows (+€18.6 bn). Money market funds showed net inflows of €1.2 bn for the first half of 2015.

The flows for the money market segment brought the overall net flows for August to minus €17.9 bn and to a positive €292.7 bn year to date.

Money Market Products by Sector

Within the money market segment Money Market EUR (+€14.6 bn) was the best selling sector, followed by Money Market USD (+€9.6 bn) and Money Market SEK (+€0.5 bn). At the other end of the spectrum only two peer groups suffered net outflows: Money Market GBP (-€6.6 bn) and Money Market HUF (-€0.04 bn).

Graph 1: Estimated Net Sales by Asset Type, August 2015 (Euro Billions)

15-09-02 Graph 1

Source: Lipper, a Thomson Reuters company

Fund Flows by Sectors

Within the segment of long-term mutual funds “Unclassified” funds (+€1.2 bn) was the best selling sector, followed by Equity Europe (+€1.1 bn), Bond EMU Government Short Term (+€1.1 bn), and Bond EMU Government (+€1.0 bn) as well as Equity Germany (+€0.8 bn).

Graph 2: Ten Top Sectors, August 2015 (Euro Billions)

15-09-07 Graph 2 - Asset Type Flows

Source: Lipper, a Thomson Reuters company

At the other end of the spectrum Equity Global suffered net outflows (-€9.8 bn), bettered by Equity Asia Pacific Ex-Japan (-€4.6 bn) and Equity Emerging Markets Global (-€3.6 bn) as well as Bond Global (-€3.3 bn) and Bond Emerging Markets Hard Currencies (-€2.7 bn).

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