ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

Investors hoard cash amid market uncertainty

Investors around the world are increasing their cash holdings as the economic slowdown in China threatens to drag the world economy down. According to data from Lipper published today, investors poured in a net $77.7bn (€70.5bn) into money market funds in July. This is more than half the total amount flowing into cash funds in…


PA Europe

As flows into cash funds gained momentum, flows into all other asset classes declined. Equities held up quite well still, registering a net $29.5bn in inflows, but flows into multi-asset funds and alternatives fell considerably. Bond flows were net negative, just like in June.

‘Cash is king’

The figures do not come as a surprise to Tim Peeters, head of securities portfolios at the

Belgian multi-family office Portolani. “Cash is king at the moment, especially compared to bonds,” he says. Peeters has allocated almost 20% of his portfolio to cash and short-duration corporate bonds, all of this in dollar. 

“I see about 10% upside potential in the dollar compared to the euro,” he says. “And in any case, I prefer exchange rate risk over interest rate and duration risk.”

In the next edition of our magazine, out in a few weeks time, we will take a more in-depth look at the current attractiveness of cash as an asset class.