While the European investment fund industry has seen a record year in terms of net sales of Ucits and non-Ucits fonds, December has been challenging for Ucits products and bond funds.
In December 2014, Ucits products registered €12bn of net outflows, compared to €27bn of inflows in November. Similarly, bond funds dipped into negative from €11bn of inflows in November to €1bn of outflows in December.
At the same time, net sales of equity funds broke-even during the month, compared to net inflows of €2bn in November.
The data, provided by The European Fund and Asset Management Association (Efama), highlight that the turnaround coincides with overall strong outflows from fixed-term funds throughout December.
Long-term Ucits, (which money market funds) registered net sales of €16bn, compared to €31 bn in November. At the same time, money market funds registered large net outflows of €28bn, however, according to Efama, this can largely be attributed to cyclical end-year withdrawals.
Looking back at the overall results of the year, Bernard Delbecque, director of Economics and Research at Efama commented: “2014 was a record year for the European investment fund industry. Net sales of European investment funds rose to an all-time high of EUR 601 billion in 2014 and assets under management broke through the EUR 11 trillion mark thanks to a growth rate of 15%. This was all achieved despite sluggish growth, deflationary threats and geopolitical tensions.”
Highlighting the recent changes, he says: “For the first time in 2014, demand for bond funds turned negative in December in a historically low interest rate environment where investors are searching for higher yield and protection against interest rate risk.”