You are here: Home - Investing -

Eurozone crisis continue to affect investor confidence

0
Written by:
26/07/2012
Instability in Europe, bad news from the US and China led to European investors withdrawing €4.2bn from long term funds with €1.2bn of redemptions in June, according to Morningstar.

This is despite the market rallying in the first quarter of this year, with elevated levels of investor confidence and resulting fund inflows.

Money market funds, which cushioned the blow for the European fund industry in the second quarter with inflows of €10 billion, still gave up €19 billion in June, the worst month for the asset class since June 2011.

Dan Lefkovitz, director of fund research operations at Morningstar said: “European asset flows reacted predictably to wobbly markets in the second quarter.

“Investors fled equities and sent capital to money markets and fixed income-especially corporate and non-euro debt. Passive funds were among the winners of the second quarter, showing the importance of low costs in a low-return environment.”

Key findings from Morningstar’s report on June fund flows:

• Equity funds were the hardest hit in the second quarter after enjoying inflows of €3 billion in the first quarter.

European investors withdrew more than €21 billion from the asset class in the second quarter, with €7.5 billion of those redemptions occurring in June.

The Asia ex-Japan equity category saw outflows of €2 billion in the second quarter after attracting roughly €1.2 billion in the first three months of the year.

• Investor appetite for bond funds remains insatiable, with fixed-income funds collecting inflows of nearly €9 billion in June to reach more than €21 billion for the second quarter.

Europe’s most popular bond fund for the quarter was Alliance Bernstein American Income Portfolio, which enjoyed inflows of €2.1 billion.

• Europe’s five largest long-term funds all enjoyed inflows in June, and all but the largest, Templeton Global Bond, had net inflows in the second quarter.

PIMCO GIS Global Total Return’s strong second-quarter inflows of €2 billion pushed its asset base above the €20 billion threshold. This is on top of the $263 billion asset base in the fund’s U.S. version.

• Allocation funds continue to benefit from uncertainty and investor focus on capital preservation over return maximization, with roughly €2.5 billion flowing to the broad asset class in the second quarter.

Carmignac as a house has benefitted from interest in asset allocation.

• Several passively managed funds, led by Vanguard FTSE UK All Share Index with inflows of €859 million, were among the top asset-gatherers in June. Passive funds are likely benefitting from the move away from adviser rebates in the UK market.

But healthy inflows to passive UBS funds and the strongest month on record for KLP AksjeGlobal Indeks show the trend extends beyond the UK. Investors are increasingly focused on controlling fees in a low-return environment.

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
2194505-webb-steve
Pension saving plummets ahead of Automatic Enrolement launch

The number of people saving through a workplace pension scheme has dropped 15% since 2007, with just a quarter of...

Close