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Global assets rebound as Europe suffers Q1 outflows

Global_assetsWorldwide investment fund assets have seen a resurgence in the first quarter of this year, increasing by 9.2% to €48.02 trillion.

Strong growth was driven by the recovery in financial markets, according to the European Fund and Asset Management Association (Efama).

Bond funds also enjoyed a rebound, with increased sales responding to “a move towards more dovish monetary policy by the major central banks”, the representative body of the European funds industry said.

Worldwide bond funds recorded net inflows of €236 billion during the first quarter of 2019 – a stark difference from the net outflows of €59 billion see in the fourth quarter of last year.

This increase in global sales was mostly driven by inflows amounting to €123 billion in the US, followed by Europe (€80 billion), and emerging markets (€21 billion, of which €20 billion was seen in China.

Equity funds, however, did not fare so well due to a “lacklustre” demand “in the face of a slowdown in economic growth”. Global equity funds recorded outflows of €22 billion, compared to the net inflows of €99 billion seen in the last quarter of 2018.

On a European level, net outflows reached €37 billion, not fully offset by limited inflows in other advanced economies such as the US and emerging markets, both recording €3 billion in inflows.

May was also the thirteenth consecutive month with net outflows from long-term mutual funds, according to analysis on European fund flows by data provider Refinitiv. Investors pulled out €12.7 billion during the month.

Ireland was the fund domicile with highest net inflows, reaching €8.2 billion driven by money market products (€7.1 billion). The UK came second with €4.5 billion of inflows, followed by Switzerland with €0.6 billion, the Refinitiv report found.

The best-selling fund promoter was US-based Pimco with net sales of €3.8 billion. Morgan Stanley and Vanguard Group recorded net sales of €3.5 billion and €2.6 billion respectively.

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