Fixed income hit new highs in April

Equity funds lost around £344m in April, the first time the asset class has seen outflows since August last year, according to data provided by Morningstar. The situation is being attributed to ‘sketchy growth prospects for the eurozone’.

The table below shows estimated net flows across the asset classes both for April and 2013 to date.

Demand for alternative funds, while strong, was very concentrated during the month as Standard Life Global Absolute Return Strategies accounted for one third of inflows into the asset class.

The fund currently has £16.7bn under management of which around 43% is invested in money market assets. Its performance over the past year is shown in the graph below.

Search for yield

Of the top selling bond categories, half were global bond suggesting the run on bond funds is a search for yield in the face of historically low interest rates, according to the analysis.

Top seling bond categories included USD flexible bond, other bond, USD high-yield bond, global high yield bond and global emerging markets – local currency bond.

The only equity fund category to feature high in the flow rankings was global equity income, which includes those funds with a focus on high dividend equities. The M&G Global Dividend Fund topped the list in this category with inflows of €466m in April.

Outflows

European large cap blend equities and Eurozone large-cap funds registered outflows of €741m and €501m respectively, while UK large cap blend equity saw the largest outflows of all at €1.5bn during the month.

The table shows the top five funds in terms of inflows and outflows in April.