The final week of November saw global and European bond funds post their highest weekly outflows since 2008 as investors continued to spurn European sovereign debt, according to data from analyst firm EPFR.
The exodus from European bond funds gained pace after Germany failed to sell more than two-thirds of new sovereign bonds in an auction on 23 November. Redemptions from German bond funds were at their highest level in three years, said EPFR Global.
The figures showed investors were still acting defensively; the sectors that attracted the most new money were money market, US bond, and gold and precious metals funds.
Flows into equity funds were positive overall, although much of the new money was aimed at funds that target dividend-paying stocks – another sign of defensive behaviour from investors.
For asset managers, the most significant statistic may be that actively managed funds have collectively hemorrhaged $189 billion (€140 billion) this year. In the face of high volatility, it seems investors do not believe manager skill will get results.
Instead, investors have opted for index trackers such as exchange-traded funds, which have gained $80 billion of inflows.
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