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.
As a result of investors pulling back from equity funds, Franklin Templeton scored the highest of fund provider groups for sales due to its specialism in fixed income. Franklin Templeton’s fund sales were €2bn, allowing it to overtake BlackRock which in February gained €3.6bn in flows which dropped to €1.2bn in March, putting that group in third place for sales.
UBS registered the second highest sales in March with €1.6bn. In spite of the depreciated sales of equity funds overall, both BlackRock and UBS were most successful in selling that asset class to investors.
In a sign of increasing investor caution however, equities investing in both the eurozone and emerging markets suffered redemptions of €1.9bn and €900m respectively. German and US products gained €2.2bn and €2.1bn.
Equities would have suffered redemptions of €10bn overall, if it weren’t for exchange traded fund (ETF) investments, said Lipper. ETFs offer diversification and mitigate single stock risk as they track a diversified index, limiting the impact of individual stock falls.