We use cookies to support features like login and allow trusted media partners to analyse aggregated site usage.
To dismiss this message and allow cookies to be used, please click "Continue".

Continue

News/Analysis

Twitter board

Follow us
  • Friday View: Piecing together the pooling puzzle- DGF Roundtable - Royal Mail names pensions boss -LGPS Central sel… https://t.co/DPfZ3WUv6K2 days ago
  • portfolio institutional is launching a new series on LGPS pooling, tracking changes to investment strategies and up… https://t.co/Ld04PZ2TNK4 days ago
  • Friday View: ESG: What lies beneath? - Industry backs DWP's ESG push - LGPS Central CEO to step down - Railpen hire… https://t.co/S3knBieob09 days ago
  • Out now- The portfolio institutional September issue feat our cover on ESG: What lies beneath? -Interview: Railpe… https://t.co/x9EYxDVXEl13 days ago
  • Friday View: LGPS pool appoints CIO - Jack Dromey on cost reporting - TPR hires former FCA director - NEST issues p… https://t.co/aNVGQqK35Z16 days ago
  • RT @AonRetirementUK: How prepared is your portfolio? Read a write-up of the discussions at our recent event with @portfolio_inst, along wit…18 days ago
  • "Shadow pensions minister Jack Dromey comments on the need to set compulsory standards for cost reporting." Read m… https://t.co/vH1gGZBm1q18 days ago
  • "Border to Coast, a recently launched £46bn public sector pension pool, has appointed Daniel Booth as its chief inv… https://t.co/AlIwikhgli19 days ago
  • Friday View: Spike in shareholder rebellions - Investors ditch GBP funds - Access launches first  pooled fund - GAM… https://t.co/aFzvBWgsmp23 days ago
  • Join us and HarbourVest Partners for breakfast to discover how access to private companies can provide diversificat… https://t.co/JaRlWiziJl23 days ago
  • "Ian Scott tells Mark Dunne about being back on the buy side, hedge funds, self-sufficiency, the trouble with infra… https://t.co/G0UUF9ldSx24 days ago
  • "Aon has developed an ESG rating system for buy-rated investment strategies which is designed to assess whether and… https://t.co/mstoAc3vr325 days ago
  • "With hedge fund performance improving and pension scheme investment increasing, has more institutional backing res… https://t.co/JVcIEXXKwr30 days ago
  • "The infrastructure repair bill is huge and more and more pension funds are willing to step in and plug the funding… https://t.co/zXy2lbpj6K31 days ago
  • "For investors looking to own sustainable businesses, engagement is the new divestment." Read more here:… https://t.co/YiA28qc6BI32 days ago
  • "Thanks to climate change, pension scheme portfolios are in danger of overheating. So what are trustees doing to pr… https://t.co/8gND4lC1OZ33 days ago
  • RT @eVestment: With research claiming that companies with high #ESG standards make better #investments, are sustainable strategies on the v…37 days ago
  • "The revolution in how investors are assessing companies is gaining momentum. No longer considered niche, responsib… https://t.co/uFCHnMlOux37 days ago
  • Friday View: Beyond bonds: The future of LDI - Responsible investing: Just reward - Just buys DB adviser - Ex Railp… https://t.co/1suOFFSprA37 days ago
  • "An increasing number of pension schemes are adopting a more efficient way of investing." Read more in our in-dept… https://t.co/F6Y0e9DB5E37 days ago

Pensions

European investors ditch GBP funds amid Brexit fears

European investors ditch GBP funds amid Brexit fears

Mona Dohle
Thursday 30th August 2018

European investors have used the end of the second quarter to adjust the currency positions in their portfolios reducing their GBP exposure, amid growing concerns over a potential “no deal” Brexit.

June saw a sharp increase in outflows from money market funds, from €6bn (£5.4bn) in May to €21bn (£19bn) the next month, reinforcing already negative data for European Ucits funds, European Fund and Asset Management Association (EFAMA) revealed.

While money market funds often report a spike in outflows towards the end of a reporting period, having dropped by €33bn (£29.9bn) in June last year, the most recent adjustment comes amid an overall decline in net Ucits sales, from €9bn (£9bn) to €25bn (£22.6bn) month on month.

Excluding money market fund outflows, Ucits recorded net outflows of €4bn (£3.6bn) in June, compared to €3bn (£2.7bn) in outflows the previous month.

More recent data from Lippper suggest that investors have used the end of the reporting period to sell GBP money market funds and increase their exposure to other currencies, most notably the Euro and USD. As of July, money market funds reported net inflows of €8.1bn (£7.3bn), including €7.6bn (£6.9bn) of net inflows into USD denominated funds and €6bn (£5.4bn) into Euro denominated funds while GBP denominated money market funds reported €5.5bn (£5bn) in net outflows.

“Comparing this flow pattern with the flow pattern for June showed that European investors reduced their positions in the GBP while they built up positions in the US Dollar and the Euro” Lipper confirmed.

Recent trends on currency markets illustrate that investors might have caught the right tone. Following Theresa May’s statement that a no deal Brexit would be better than a bad deal, the pound dropped to its lowest level in 11 months, reaching €1.099 at the end of August.

Investor caution over the Brexit outlook extended to the broader UK fund market. The UK remained the fund domicile with the highest net outflows of €2.9bn (£2.6bn) in July. In contrast, France appeared to benefit from growing demand for Euro denominated money market funds, reporting net inflows of more than €9bn (£8bn) in July, Lipper data showed.

0

Leave your comment

View our comments policy

Please login or register with us to leave a comment. It's completely free!