European investors moved to ‘risk off’ in January

Arrow down1Investors pulled €42.6 billion from European mutual funds in January, with bonds, equities and mixed assets all hit – though ‘alternative’ Ucits products raised money.

Lipper, a data provider, showed that bond funds were the least favoured after investors pulled €20.2 billion from them, followed closely by equity funds at €19.7 billion.

Detlaf Glow, head of Europe, Middle East and Africa research at Lipper, said European investors were selling risky assets in a risk-off mode after a spike in volatility and a downward trend in equity markets.

Investors also pulled €5.3 billion from mixed-asset funds and €40 million from commodity funds.

However, there was a clear appetite for alternative Ucits funds which enjoyed the highest inflows of any asset class at €2.2 billion, while real estate funds also appealed to investors, raising €1 billion.

In times of market stress, investors favour putting funds into money market funds and last month was no different with €13.6 billion added to this asset class.

Luxembourg, the largest centre of cross-border funds, leads the pack of domiciles worst hit by last month’s rout, with investors making €33.5 billion in redemptions.

Despite investors exiting from funds, sentiment for European equities remained steadfast. Eurozone equities were the best-selling funds.

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