Investors wary of equity despite strong performance

Equity funds performed strongly in the third quarter of this year, but investors still withdrew $22.8bn (€16.5bn) from the asset class – preferring bond funds and money market funds, which saw $83bn in net new money over the same period. Equity ETFs also saw significant inflows of $14.9bn.

Data from Lipper FMI showed that equity funds had their best gain, of 12.52%, in Q3 last year and also generated their strong September return of 9.63%, since at least 1959. But fund investors remained wedded to their fixed income and perceived safe haven bets.

The outflow from equity funds did not include passive instruments such as exchange-traded funds (ETFs). In fact, in its latest report, Lipper found that some investors were “choosing to tiptoe back into the equity arena” using these products. The data showed that equity ETFs saw $14.9bn in inflows over the third quarter 2010.

Tom Roseen  research manager, U.S. & Latin America, at Lipper, who wrote the report, said that for the first quarter since Q2 2009, world equity funds outpaced the other three broad macro-classification breakouts, returning 16.68%. The next in terms of ranked performance were sector equity funds which generated 13.78%.

For the quarter all but one of Lipper’s 79 equity fund classifications posted plus-side returns, with Latin American funds  and diversified leverage funds leading the way, having generated 25.93% and 22.61%, respectively.

The four equity classification laggards for the quarter were the bear-oriented dedicated short-bias funds, with -18.60%, equity market-neutral funds, with 1.74%, financial services funds, with 5%, and specialty diversified equity funds , which returned 5.16%.

©2010 funds europe

HAVE YOU READ?

THOUGHT LEADERSHIP

The tension between urgency and inaction will continue to influence sustainability discussions in 2024, as reflected in the trends report from S&P Global.
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

CLOUD DATA PLATFORMS

Luxembourg is one of the world’s premiere centres for cross-border distribution of investment funds. Read our special regional coverage, coinciding with the annual ALFI European Asset Management Conference.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST