Invesco’s absolute return fund is on the path to overtaking rival Standard Life Investments Global Absolute Return Strategies for the fund with the highest level of outflows this year.
Redemptions from the Invesco Global Targeted Return Strategies hit £740m in June, according to UK fund flow data from Morningstar.
The data provider noted the fund’s heavy outflows were mainly to blame for the alternatives sector’s net outflows for the month of £903m which shrank total assets to £33bn.
In the last year investors have pulled £13.5bn from the asset class, making it the most unloved of all Morningstar’s seven global fund categories.
Invesco Global Targeted Return Strategies haemorrhages cash as flows return to the sector
But the research house noted that recently outflows across the sector have been slowing with the exception of the Invesco Global Targeted Return Strategies.
At the halfway point this year the fund has seen £2bn flow out, the bulk of which has happened during the second quarter as equity markets rebounded. Weeks into the coronavirus sell-off the fund had £9.5bn in assets but by the end of June that figure stood at £7.5bn, according to Trustnet.
At the rate the fund is currently going Morningstar said it looks set to surpass Gars, the alternatives vehicle with the highest net outflow for three years running, as the sector’s biggest laggard.
Sentiment toward equity funds sees sharp reversal
After two months of net inflows UK-domiciled funds suffered £1.3bn in net outflows in June as investors turned more cautious, Morningstar revealed.
Equity funds saw a devastating reversal in sentiment with investors yanking £2.1bn from the asset class, while fixed income funds, which had a tough time in April, attracted £1.2bn, becoming the best selling asset class.
“Volatile markets this year have caused investor behaviour to be just as volatile,” said Morningstar associate analyst of manager research Bhavik Parekh.
“March saw a record high net outflow, followed by very strong inflows in April. At that time, fixed-income funds were very unpopular, while equity funds were in favour. However, over the past two months this has completely reversed.”
