Swiss fund volumes remain stable in August

August has been a stable month for the Swiss fund market in terms of fund flows. After a surge in inflows in the summer, the volume of assets levelled at just under CHF700bn (€580bn).

Dr Matthäus Den Otter, CEO of the Swiss Funds Association, said: “There was a relatively stable development in [August]. The equity markets showed more of a sideways trend.”

In June, the local industry had reached a five year high, driven primarily by market appreciation, and a strengthening of the Swiss franc – the currency in which assets are reported – against major currencies in which many of the country’s managers’ investments are denominated.

But Den Otter says “currency effects – which were still having a strong influence in July – were almost entirely absent as the Swiss franc recovered against the Euro and US dollar.”

“It therefore comes as no surprise that fund volumes remained roughly on a par month-on-month,” he commented.

Net inflows into Swiss funds in August came to merely CHF2.2bn, with most of the new money flowing into bond funds.

Outflows from asset allocations funds continued, albeit more modest than in the previous months. From June to July, Swiss asset allocation funds lost nearly CHF370m in net flows, while most other asset classes experienced inflows. In August, the outflows slowed to CHF179m.

But the continued outflows mark a trend among Swiss investors to move away from asset allocation funds as they increasingly choose to make their own allocation decisions. The main reason for this is that many banks offering mixed products have a set proportion of equity in their funds, which is too high in the eyes of the conservative Swiss allocators.

Swiss investors are still weary of the equity market and its volatility while the European debt crisis prevails. Unsurprisingly, then, equity funds have experiences the most outflows in August.

The asset class lost CHF755m, with funds focused on the UK, US, global and emerging markets suffering the most.

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