EUROPE: UCITS funds experience positive inflows in Q1

Wednesday May 27 2009

A recent survey by EFAMA which had pointed to expectations of seeing positive inflows this year may have just proven itself right as the latest EFAMA statistics reveal UCITS funds posted a net inflow of Euro 22 Billion for the first quarter of 2009 after six consecutive quarters of outflows.

The report says that the positive results can largely be attributed to the sharp deceleration in net outflows from long-term UCTIS (equity and bond funds) together with strong inflows of Euro 52 Billion into money market funds. UCITS outflows dropped from 140bn in the fourth quarter of 2008 to Euro 31 Billion in the first quarter of 2009 .

The amount of money moving out of UCITS funds fell from Euro . largely because of significantly lower net outflows from equity and bond funds, according to the Brussels-based body for European financial associations.

The combined assets of the investment fund market in Europe, i.e. the market for UCITS and non-UCITS, fell by 1.4 % in the first quarter to reach EUR 6,022 billion at end March 2009.

During Q1, Equity funds and Bond Funds in the UK saw net inflows of Euro 1,090 Million and Euro 5,141 Million respectively. France saw the highest positive fund sales of Euro 33 Billion, whereas Italy, Luxembourg and Spain suffered the largest outflows losing more than Euro 15 Billion between them.

Other countries which have experienced positive inflows include Germany, Liechtenstein, Norway, Romania, Sweden, Switzerland and Turkey.

EFAMA believes that recent government moves to support the sector have contributed to much of the recovery.

“The sentiment that the global financial system had been spared a systemic collapse and that massive effort by governments and central banks had limited the risk of a depression contributed to stop panic sales of shares and bonds in general, and investment funds in particular. As money markets started to recover from the shock waves from the bankruptcy of Lehman Brothers, money market funds regained their status of safe haven investment”.