Cash fund domination continues as European investors stay cautious

Added 22nd November 2016

European investors poured money into money market funds in October, as caution continued to rule the roost.

Cash fund domination continues as European investors stay cautious

According to the latest Thomson Reuters Lipper European Fund Flow report, €29.4bn flowed into the asset class during a month, that saw net inflows into everything buy equities.

The second most popular sector at a net level was mixed assets, which recorded €4.6bn in inflows, with bonds recording inflows of €2.7bn at an aggregate level.

When looked at in more detail however, clear preferences emerged.

As is evident from the graph below, with €20.9bn in inflows, euro-denominated money market funds were the clear winner. These funds pulled in roughly four times the inflows of the next best sector, US dollar-denominated money market funds.

 

Within bonds, emerging market debt, global bond funds and inflation linked bonds both global and euro-denominated were in favour.

On the other side of the equation, sterling corporate debt and European government debt saw significant outflows over the period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Even though these flow numbers seemed to indicate that European investors continued to stay cautious in October, the sector flows showed they further tended to chase yield,” Detlef Glow, Head of EMEA Research at Thomson Reuters Lipper said. 

At a sectoral level, euro-denominated funds reported €20.9bn in inflows, continuing the trend seen in September. Similarly, as in September, US dollar and sterling denominated industries also saw a continuation of inflows in October of €5.3bn and £3.2bn respectively.

At an aggregate level, fund flows into mutual funds in Europe recorded net inflows of €33.8bn for October.

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Geoff Candy

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Geoff Candy joined Portfolio Adviser as News Editor in May 2014. He has been a financial journalist and broadcaster since 2005 and, in that time has worked in both South Africa and the Netherlands, covering everything from high street retailers and construction companies to mining and insurance.

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