The European funds industry suffered total redemptions of €3.6bn during the month, reducing the total for year-to-date net sales to €108.8bn. Excluding money market vehicles (which posted inflows of €8.2bn), the picture looked even grimmer with total outflows of €11.8bn.
“Stock market fears, and the resulting impact on equity fund sales, were sufficient to decimate activity in the previously buoyant UK and cross-border markets, suffering outflows of €1.6bn and €1.7bn respectively (excluding money market funds),” said Ed Moisson, Lipper’s head of UK and cross-border research.
“Having said this, the Italian (-€2.4bn) and French (-€1.7bn) fund markets endured further severe withdrawals.”
While investors have been heading for the shelter of cash and bonds, they seem less sure of the defensive qualities of absolute return funds. The sector fell to its lowest monthly total of 2012 at €350m, bringing its year-to-date total to net sales of €5.6bn.
The three best-selling mutual funds in May were Pimco GIS Global Investment Grade Credit (€830m), Alliance Bernstein American Income Portfolio (€750m), and Allianz US High Yield (€740m).
“Besides ETFs, several groups managed to attract healthy inflows to their equity funds this month,” added Moisson.
“The three at the top of the tree reveal different underlying stories. Saudi Arabian-based Sedco has just launched three Shariah-compliant funds (€480m), Morgan Stanley’s sales (of €390m) have been led by two well-established actively managed funds (Global and US equities), while Vanguard’s inflows spread across a variety of index tracking products (totalling €200m for equity funds).”