According to the Spanish asset management organisation Inverco, fund buyers in Spain poured over €1bn into bond funds in April and May combined, reflecting a wider European trend.
Almost all inflows went into short-duration bonds, suggesting it’s not a conviction trade. After all, 75% of delegates at the Expert Investor Spainforum held today expect a diversified bond portfolio to return less than 2% annually over the next five years. In May, €254m was invested in Spanish short-duration bonds, while investors put less than €33m into long-duration paper. International government and corporate bond funds saw inflows of €217.5m over the month.
The popularity of bonds doesn’t mean equities are being sold off, as seems the case in much of the rest of Europe. Spanish investors are arguably the most loyal supporters of European equities. While the rest of the continent is selling off aggressively (with €8.5bn of net outflows in April alone), the Spaniards keep adding European equity funds, albeit at modest pace. They invested a net €75m in April and €93m in May.
