Institutional flows buck year long negative trend

US fixed income was the main target of resurgent investment flows from institutional investors in the first quarter.

After four consecutive quarters of outflows from broad asset classes, flows turned positive in Q1, with US fixed income attracting $70.9 billion (€63.5 billion) of allocations, mainly from US investors but also from investors based in the UK, according to eVestment figures.

Investors also withdrew $120 billion from active strategies.

In the four quarters to the end of Q1 2017, Europe ex-UK investors added to fixed income strategies and withdrew assets from Europe, US, and emerging markets equity strategies.

Net redemptions from Europe equity strategies were “substantial”, at $29.13 billion for the four quarters.

European investors favoured global equity strategies, with asset managers investing in this segment seeing $11.59 billion of inflows.

UK investors allocated $1.22 billion to US fixed income, but more ($3.5 billion) went into UK fixed income.

Overall net flows from the UK were generally negative during the four quarters. Emerging markets equities and bonds were “particularly out of favour”, said eVestment in its ‘Traditional Asset Flows’ report.

US investors were the main allocators to US fixed income, but they also funnelled money to emerging market bonds. There were no positive net flows to regional equities.

Net long-only institutional flows were up $17.9 billion in Q1 over the previous quarter. However, net flows for the four quarters were still negative at $337.4 billion.

©2017 funds europe

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