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Ucits hit 18-month high amidst downturn fears

Ucits funds salesNet sales of Ucits funds reached an 18-month high in July, according to the latest data from the European Fund and Asset Management Association (Efama).

Inflows for Ucits funds hit €86 billion – a marked increase from the €7 billion of positive flows seen in June.

Investment into bond funds were a primary driver, with sales increasing to €39 billion from €27 billion in June.

Equity funds continued their negative trend with net outflows to the amount of €1 billion.

There was a change in tide for multi-asset Ucits funds, the report also found.

In June, multi-asset funds saw outflows of €6 billion. In July, as investors flooded money in to the fund type, inflows reached €4 billion.

Alternative investment funds (AIFs) saw a drop in new money. Inflows for AIFs sunk to €8 billion – down from €17 billion in June.

According to the Efama report, total net assets of Ucits and AIFs put together increased by 1.8%, reaching €16.9 billion.

Bernard Delbecque, senior director for economics and research said: “Net sales of UCITS were strong in June. This was driven primarily by high demand for bond funds as investors continue to anticipate further monetary stimulus; and for money market funds, which offer investors a good place to invest cash holdings in times of uncertainty”.

According to separate data released by Refinitiv, August was the sixth consecutive month in which long-term mutual funds posted inflows.

Overall fund flows for mutual funds in Europe hit €49.2 billion, primarily driven by money market funds which saw €26.4 billion of new investor cash.

Luxembourg was the domicile with the highest total inflows with €26.4 billion.

“Investor concerns regarding declining earnings and the possible effects of a trade war between the U.S. and China materialized in Europe’s August fund flows,” said Detlef Glow, Head of Europe, Middle East and Africa research at Refinitiv.

“Nevertheless, August was the sixth month that long-term mutual funds posted net inflows this year,” he said.

According to Glow, it was surprising that bond funds were the best-selling asset type given the current interest rate environment.

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