markets & strategies
Fund groups that sell cross-border from Luxembourg and Dublin achieved the highest sales in September, according to data by FERI-FMI. However, European domestic players had the greatest outflow totalling funds of E3.2bn.
The groups in Luxembourg and Dublin achieved net inflows of E4.6bn following high sales in equity funds. These groups have a strong equity bias in many of the current growth sectors. Their reliance on third party distributors means that their natural target buyers are private banks and portfolio managers servicing high net worth individuals (HNWI).
Axa had the highest sales figure from January to September with E1,683m, this was followed by Fidelity Investments at E1,636m, then Merrill Lynch at E1,283m.
It was Japanese focused funds including small and mid- cap remain the product choice for investors in cross-border funds, attracting E716m in September alone. The Spanish market was the next biggest market following from cross-border international market with an increase in inflows of 12.7%, UK had an increase of total inflows of 10.3%, Sweden net inflows rose 8.6% and Denmark flows rose 4.2%.
Diana Mackay, managing director of FERI Fund Markets Information, said: "The domestic groups, which dominate through their bank presence have a franchise over the mass market savers, but these investors are still suffering the pain of the bear market and, until their confidence revives, cross-border groups can, and will, win market share."
France and Italy were the largest contributors to September fund outflows. Together they suffered outflows of more than E5bn. But, surprisingly, the high level of exit was from the popular money market and bond sectors.
September is traditionally a negative month for France as investors denude their money market accounts to pay for their summer holidays and pre-school year expenses. In Italy, though, the move out of the recently favoured short-term bond products is the result of an asset allocation shift by investors into equity funds.
However, net sales of equity funds were on a high in both markets. In the case of Italy, the total inflow was the highest for 18 months and the French total was the second highest of the year.
Mackay said: "September was a very odd month. On the face of it, the market revival seemed to come to a shuddering halt. Net asset values took a tumble and the industry suffered its first month of redemptions this year.
However, if you discount the cyclical French factor, you can see that most of the key markets are at a turning point. Although the move into equities has not yet stabilised, investors no longer see money market and bond products as the only sensible place to be."
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