According to transactions carried out on the Skandia Investment Solutions Platform, sales of cash and money market funds have more than halved over the past 12 months. At the end of Q2 this year, sales accounted for 5.8% of the total compared to 12.2% at the same time last year.
Much of this money has gone into equities although the vast majority is still going into fixed income.
Looking towards the continent and we see a very different picture.
Lipper FMI shows that investment in money market funds during the single month of May with the huge flow into money market funds (€9.6bn; £8.5bn) clearly demonstrating investors’ equity aversion. If we discount money market funds then the total invested across Europe for the month would be €13.2bn.
Admittedly, the Lipper figures are a snapshot of a single month but they still show a significant hike in investors looking to cash as their main source of return and protection. In the UK investors seem to be more risk aware and less risk averse although they are still looking to fixed income first rather than going gung-ho into equities.
Today’s inflation figures show CPI fell by 0.3%, down to 4.2%, but it is largely being reported as an “unexpected” drop so while it is good news, investors in the UK at least are likely to stick with fixed income assets for the time being.
