Fund Investors Embark on Selling Spree

Investors in funds have been redeeming their investments at a rapid rate amid concern over rising rates and the Fed's expected tapering

Ali Masarwah 30 September, 2013 | 1:42PM
Facebook Twitter LinkedIn

Europe's fund industry has been reeling from investors' change in sentiment in the past three months. Since the Federal Reserve laid out its timetable for the tapering of bond buying (commonly known as QE3) at the end of May, investors have embarked on a selling spree, redeeming long-term funds on a substantial scale.

In August alone, the European fund industry was hit with outflows from long-term funds to the tune of EUR 2.1 billion. Bond funds suffered most with investors withdrawing EUR 7.9 billion. Equity funds saw net redemptions of EUR 683 million. Demand for allocation funds was solid at EUR 4.3 billion, as were inflows into alternative funds that pursue hedge fund-like strategies. Net inflows into this latter asset class slowed to EUR 1.4 billion in August.

While long-term funds suffered outflows in August, money market funds profited from the ‘risk-off’ mode, enjoying net inflows of EUR 7.9 billion after seeing net redemptions for four months running. Due to practically non-existent returns, these short-term products have seen outflows of EUR 23.3 billion so far in 2013 and EUR 45.5 billion in the past 12 months.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Ali Masarwah

Ali Masarwah  is the editor of Morningstar.de in Germany.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement