Belgian selectors undeterred by EM debt sell-off
Emerging market debt sentiment has suffered recently due to a few problem countries but opportunities still seen
Emerging market debt sentiment has suffered recently due to a few problem countries but opportunities still seen
Japanese and European equity funds lead sell-off as investors avoid riskier assets, although US equity funds buck the trend
Total fund sales for the first half of year across Europe was €59.8bn about six times lower than €362.4bn first-half sales in 2017. But ETF market share hits record high, according to Thomson Reuters Lipper data.
European investors retreated from risk in June according to State Street’s investor confidence index amid rising European political turmoil and global trade war fears.
Active bonds suffered €7bn in outflows along with active commodities and convertibles, hitting Europe’s asset management industry for the month of February.
New Morningstar data shows that around 16% of European assets invested in funds were held in passive strategies in January 2018, much less than many had expected.
US dollar denominated money market funds topped the charts in terms of inflows for January this year, while UK sterling funds saw the biggest outflows from this sector, according to the latest Thomson Reuters Lipper data.
European-domiciled emerging market (EM) funds have seen a spectacular turnaround in fortunes at the start of 2018 with inflows up €14.5bn during January to reach a total €11.4bn of assets under management after there were €3bn of outflows in December, according to Morningstar data on global categories.
In the year of the dog shares of companies based on the Chinese mainland are set to emerge as leaders of the pack for investors in China as the world’s second largest economy enters the MSCI Emerging Markets Index in May. But European investors have already begun to move.
Luxembourg’s popularity as an international fund management centre helped boost assets under management (AUM) in the tiny Duchy by 11.18% in 2017 to reach €4.16trn, according to the Association of the Luxembourg Fund Industry (ALFI).
While Danish fund selectors are renowned for being some of the most optimistic in Europe in responding to Expert Investor’s research, their latest sentiment on equities are systematically less positive compared with the European average.
European investors increased their risk appetite in 2017, recording high inflows into pure equity funds compared to outflows in the previous year, helped by a big rush into passive equity funds, according to a Thomson Reuters Lipper report.