Ucits funds lose €10bn in September, EFAMA reveals

After a surge in inflows into Ucits funds in August, they have seen €10bn flowing out in September, according to the latest report from the European Fund and Asset Management Association (EFAMA).

In August, Ucits funds saw €24bn inflows, four times the volume of the previous month. EFAMA attributed this increase to net sales of money market funds.

In September, however, the positive flows reversed once again. This, too, was caused primarily by money market fund flows.

While August saw net inflows into MMFs of €11bn, in September they lost €23bn. This picture is consistent with a longer term outflow trend from MMFs.

August was the only summer month with net new money flowing into this investment vehicle. In June and July these funds experiences net outflows, of €24bn and €18bn, respectively.

MMFs have had a tough run in the past few months. Euro-denominated funds have suffered particularly, as low interest rates across the region have had a negative impact on fund returns.

However, investor sentiment towards other fund vehicles was much more positive in September. Allocators were particularly bullish on long-term investment vehicles, encouraged by the promise of more stability from the European Central Bank (ECB).

Bernard Delbecque, director of economics and research at EFAMA, said: “The ECB’s decisions as regards Outright Monetary Transactions and the approval of the European Stability Mechanism by Germany’s Constitutional Court enticed investor return to equity funds, thereby supporting net sales of long-term funds.”

In September, long-term Ucits (excluding money market funds) registered net inflows of €13bn for the second month in a row.

Notably, equity funds saw inflows for the first time since March. They attracted €3bn, which helped somewhat to offset the €10bn of redemptions in the previous month.

Bond funds, once again, have seen more net new money than other investment vehicles, with €9bn in total flowing into this asset type.

Although this is only half of the inflows experienced the previous month, bond funds have still drawn in €141bn year to date, beating all other asset categories.

Total net assets of Ucits increased by 0.4% in September to €6,223bn, while non-Ucits net assets increased by 0.5% to stand at €2,470bn.

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