The latest UCITS sales figures from May 2011 are showing signs of a flight to quality as the sovereign debt crisis bites, but future reports may be more revealing on how investor reactions.
Bond funds enjoyed a jump in net inflows in May 2011 to record inflows of EUR 8bn, considerably higher than the EUR 1bn of withdrawals recorded in April, according to the latest report form The European Fund and Asset Management Association (EFAMA).
Explaining the increase in bond fund sales, Bernard Delbecque, Director of Economics and Research at EFAMA, said: “Overall, UCITS continued to enjoy robust net sales in May in spite of the escalating sovereign debt crisis. The rebound in fixed income securities amid volatility in the markets highlights a shift in investors’ preference towards less risky assets.”
UCITS experienced increased total net inflows in May of EUR 22bn up from EUR 21bn in April, as all UCITS sub-categories enjoyed net inflows during the month. While bond funds enjoyed the highest net inflows, balanced funds, and equity funds all saw net sales increases, although at reduced levels to the previous month.
Money market funds recorded net inflows in May amounting to EUR 6bn, an increase from the break-even level experienced in April. Long-term UCITS (UCITS excluding money market funds) continued to enjoy net inflows in May of EUR 16bn, albeit at a reduced level from April when net inflows amounted to EUR 21bn.
Special funds (funds reserved to institutional investors) saw net inflows reduce to breakeven point, their lowest level of net inflows since June 2009. Total assets of UCITS amounted to EUR 5,928bin at end May 2011, an increase of 1.1 percent since end April.
Twenty three associations representing more than 97 per cent of total UCITS and non-UCITS assets at end May 2011 provided EFAMA with net sales and/or net assets data. EFAMA is the representative association for the European investment management industry. .
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