Market uncertainty sparks demand for multi-asset

29 May 2018

European investors have reduced their exposure to all major asset classes and have increased investments in multi-asset funds instead.

As of March 2018, net sales of Ucits and AIF funds increased to €47bn (£40.9bn), compared to €25bn (£21.78bn) the previous month, according to European Fund and Asset Management Association (EFAMA)monthly fund flow report.

Equity funds reported the strongest fall in demand from €25bn (£21.78bn) in February to €14bn (£12.20bn) in March, followed by a marginal decline in bond fund sales from €4bn (£3.4bn) to €3bn (£2.6bn) month on month, EFAMA said.

In contrast, demand for multi-asset funds increased sharply, from €16bnb (£13.9bn) in February to €24bn  (£20.9bn) in March, EFAMA said.

Bernard Delbecque, director of Economics and Research comments: “Against the background of continuing uncertainty in financial markets, investors reduced their net sales of equity and bond funds in March to the benefit of multi-asset funds.”

The trend towards multi-asset is also reflected in Lipper’s  fund flow data for April, which reveal that European mutual funds have attracted €28.2bn (£24.5bn) in net inflows in April alone. Lipper data also points to growing demand for money market funds, which have seen a €10.6bn (€9.2bn)  increase in net inflows month-on-month, making them the best-selling asset class in April.

The UK asset management industry has only marginally profited from the growing demand for multi-asset attracting €0.2bn (£0.17bn)  in net assets, compared to Luxembourg, which has seen a €2.5bn (£2.18bn) increase in multi-asset investments.

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