Europeans move into bonds and away from equities in March - Lipper
Sales of European funds dropped significantly in March, hitting a 10 month low, as investors grew more cautious by putting their money into bonds and pulling out of equities.
Sales of European funds dropped significantly in March, hitting a 10 month low, as investors grew more cautious by putting their money into bonds and pulling out of equities.
Following February’s first decline in European fund sales excluding money market funds since November 2010, in March sales dropped to €330m from €15.7bn in the previous month, according to monthly research by Lipper.
With money market funds included, the overall picture was worse, as total sales fell to -€8.9bn in March from €18bn in February. French investors’ cyclical redemptions from money market funds drove the decline on the previous month, accounting for €7.3bn of redemptions overall from that asset class.
Growing investor caution amid global uncertainty following political turmoil in the Middle East, a spike in the price of oil, natural disaster in Japan, and continuing problems in the Eurozone was highlighted by the return to bonds as a preferred asset class over equities.
Bond fund sales reached their highest level since October 2010, when investors poured €13bn into the asset class amid revived fears over the Eurozone debt crisis before Ireland’s bailout. In March 2010, bond funds in Europe received €4.7bn.
Equity fund sales sank for the third month in a row, to a point almost as low as in May last year following the Greek bailout, when redemptions of €10.7bn were made. In March 2010, the asset class lost €9bn of flows, after recording sales of €4.6bn in February.
