Funds: European investors moved into bond funds in July and those with Luxembourg and Irish domiciles saw the biggest inflows, a new report reveals. Meanwhile, alternative and hedge funds recorded the biggest outflows.
The Grand Duchy’s funds sector is benefiting from a shift towards investing in corporate and sovereign debt, according to a new report. Nearly half (45%) of all European net investment fund inflows went into bond funds in July, Lipper, a research firm that is part of the Thomson Reuters data group, said on Wednesday.
“Bond funds--with estimated net inflows of €18.6 billion--were the best selling asset class overall for July,” Detlef Glow, a Lipper analyst, wrote in the report. “Provisional figures for Luxembourg- and Ireland-domiciled funds suggest bond funds, with estimated net inflows of around €5.8 billion, will be the best selling products for August 2014.”
Across Europe, money market funds also experienced notable inflows, of €10.8 billion, in July.
Money market funds represent around 10% of total Luxembourg mutual fund assets, according to a separate report issued earlier this year by the Efama trade group.
Funds for professional and savvier investors fared less well, according to the Lipper figures. European alternative and hedge funds saw outflows of -€0.4 billion and property funds experienced outflows of -€0.5 billion.
Across all segments, “the European mutual fund industry enjoyed overall net inflows of €41 billion into long-term mutual funds for July 2014,” the Lipper report stated.
Among all newly launched European funds in July, Lipper reported that 64% of assets went to Luxembourg domiciled funds, followed by funds domiciled in France (9%) and Italy (8%).