Equity and bond funds tumbled in June

The demand for bond and equity funds fell sharply in June amid growing fears about the global economy and the sovereign debt crisis in Europe, according to European Fund and Asset Management Association (EFAMA) data.

UCITS funds in June saw record net outflows of €29bn compared with net inflows of €22bn in May. EFAMA attributes the decline to large outflows from money market funds and lower sales of equity and bond funds.
“Uncertainty regarding the strength of the global economic recovery and increasing tensions in the euro area sovereign debt markets undermined investor confidence in June, prompting lower demand for equity and bond funds,” said Bernard Delbecque, EFAMA director of economics and research.

Net inflows of long-term UCITS funds, excluding money market funds, fell to €7bn, down from €16bn in May.

Net sales of bond funds fell to breakeven point in June, after net inflows of €8bn the previous month. Equity funds saw a turnaround in net flows during the month to record net outflows of €3bn compared with net inflows of €1bn in May.

There was a big net outflow of €36bn from money market funds, down from net inflows of €6bn in May. EFAMA said the decline reflects the cyclical flows out of money market funds at the end of each quarter and is similar to net outflows of €37bn at end December 2010 and net outflows of €34bn at the end of June 2010), EFAMA said.

Bucking the trend, balanced funds continued to show positive net sales rising to €6bn in June from €5bn in May.

The data was put together from 23 member associations representing more than 97% of UCITS and non-UCITS assets at the end June 2011. 

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