Investors return to equities after August redemptions

equities inflowsEuropean investors flocked back to equity funds in September, whilst bond funds continued to enjoy strong inflows.

Following August’s heavy redemptions as investors sought safer assets amid market volatility, equities saw €14.3 billion of new cash in September making it the best-selling individual asset type for the month, according to the latest data from Refinitiv.

Detlef Glow, regional head of research at the data provider, said: “After strong outflows from equity funds in August, it appears quantitative easing by the European Central Bank and the interest rate cut by the Federal Reserve have led European investors back to equities in September.”

The overall inflows for mutual funds in Europe for the month amounted to net €10.5 billion.

Bond funds were the second best-selling asset type with €9.7 billion of inflows, followed by mixed-assets funds (€4.2 billion), real estate funds (+€0.6 billion), and commodity funds (+€0.5 billion).

Overall net inflows into long-term investment funds totalled €24.7 billion. Exchange-traded funds (ETFs), which saw a mass sell-off in August, accounted for €19.4 billion of the positive flows in September.  

Money market products did not fare well in the current market environment, Glow said. With net outflows of €14.2 billion, they were the worst-selling asset type overall.

“ETFs investing in money market instruments contributed net inflows of €0.1 billion to the total, in contrast with their actively managed peers,” he said.

The report also found that “other” funds and alternative Ucits funds saw redemptions of €1.9 billion and €2.7 billion respectively.

Ireland was the fund domicile with the highest net inflows with €31 billion, followed by Switzerland (+€1.6 billion), the UK (+€0.7 billion), Luxembourg (+€0.6 billion), and Guernsey (+€0.4 billion).

France (-€20.7 billion) was the fund domicile with the highest outflows, bettered by the Netherlands (-1.6 billion) and Norway (-€1.1 billion).

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