Bond flight causes Dutch fund AUM drop

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Assets managed on behalf of Dutch investment funds have declined in the fourth quarter of 2017 due to institutional investors pulling money out of bond funds.

According to the latest data released by Dutch Central Bank DNB, Dutch fund assets dropped by €6.7bn from €871.8bn to €865.1bn, representing the first net fall in assets in almost three years.

The decline was caused by institutional investors withdrawing money from bond funds. Their assets declined by 10.6%, representing 23.5bn in outflows.

“This is the result of a restructuring process among Dutch pension fund. Since Dutch pension funds are often invested through investment firms, these changes have an impact on funds” DNB stated.

The challenges to fixed income funds were partially offset by positive inflows in all other asset classes. Equity funds reported a net asset growth by 3.9% throughout Q4 while real estate funds grew by 2.5% over the same period.

Another counteracting factor to the net outflows in fixed income was the positive investment performance of equity funds, which offered an average return of 4.1%, compared to 0.9% for fixed income funds.