Investor demand shifted further away from equities and into bonds during May with trade tensions cited as the reason.
Equity fund redemptions increased to €22 billion compared to €13 billion in April, according to the latest data from the European Fund and Asset Management Association (Efama).
“Investor concern about renewed US-China trade tensions and their impact on global growth triggered in May a shift in investor demand from equity to bond funds,” said Bernard Delbecque, senior director for economics and research at Efama.
Although bond funds soaked up a lot of the money from equity redemptions, net sales of bond funds still decreased over the month. A net €23 billion headed for bond funds in May, down from €25 billion in April. The decrease was slower than between March and April, when sales dropped off from €43 billion.
Money market funds had inflows of €3 billion, although this was lower than the €13 billion in April.
Overall net sales of Ucits and alternative investment funds (AIFs) fell to €12 billion. Net Ucits inflows plummeted to only €1 billion in May, down from €27 billion in April. AIF inflows also fell from €17 billion to €11 billion.
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