Ucits balanced funds reigned in June, says EFAMA

Net inflows to Ucits balanced funds increased from €5.2bn in May to €6.3bn in June according to the European Fund and Asset Management Association, EFAMA.

The inflows into balanced funds contrasted with investors’ reduced interest in equity and bond funds. Net sales of Ucits bond funds were negligible at just €0.2bn, down from net sales of €8.4bn in May. Ucits equity funds experienced outflows of €2.6bn in June, down from small May inflows of €0.7bn.

Bernard Delbecque (pictured below), director of economics and research at EFAMA, attributed declining interest in these funds to “uncertainty regarding the strength of the global economic recovery and increasing tensions in the euro area sovereign debt markets.”

bernard-delbecque-director-of-economics-and-research-efama

Ucits money market funds also suffered heavy outflows of €36bn compared to rinflows of €5.7bn in May. According to Delbecque, pulling out of money market funds at the end of a quarter is typical cyclical behaviour. Investors often withdraw money at the end of a quarter to make payments and so the outflows were not surprising, he explained.

Money market funds experienced similar net outflows in December 2010 (€37bn) and June 2010 (€34bn).

Delbecque believes the figures for July and especially August are likely to reflect the extremes of market movements. Investors typically turn to money market funds in times of market uncertainty such as these, he said.

Overall Ucits sales in June recorded net outflows of €29bn, a sharp turnaround of fortunes from May when Ucits recorded net inflows of €22bn.

EFAMA’s data is published in a monthly factsheet based on information gathered from 23 industry associations representing over 97% of total Ucits and non-Ucits assets.

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