Bond rally continued in Q3 while equity outflows slowed

European bond funds continued to rally throughout the third quarter this year, whilst equity outflows slowed, according to a report by the European Fund and Asset Management Association (Efama).

Overall, bonds accounted for over 40% of total net sales, attracting €81 billion of new investor cash.

Bernard Delbecque, senior director for economics and research, said: “The sustained high level of net sales of bond funds can be explained by the shift towards more accommodative monetary policies and the market’s assessment that this stance will be necessary for a prolonged period.”

Equities saw a slowdown in redemptions from €32 billion in the second quarter to €12 billion by the end of September. According to Efama, persistent downside risks related to trade policies and geopolitical factors continued to weigh on their demand.

According to Delbecque, the equity outflow slowdown suggests that investor confidence in the recovery of future economic growth started to improve during the third quarter.

Total net assets of Ucits funds and alternative investment funds increased by 3.8% to €17.2 trillion throughout the quarter, with Ucits funds accounting for the lion’s share of sales with €157 billion – up from €39 billion in the second quarter.

Money market funds also enjoyed inflows of €73 billion.

©2019 funds europe

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