Global assets under management in the collective investment funds industry dropped by US$ 1.44 trillion or minus 4% in August and stood at US$ 34.7 trillion at the end of the month. Estimated net outflows accounted for US$ 20.8 billion while the remainder of the drop was due to market losses. Thus a provisional all time high in assets under management was reached at the end of April 2015 with US$ 36.4 trillion, according to Lipper Thompson figures.
All asset types posted negative average returns with Equity funds performing worst at minus 6.9% on average in US$ terms, while Bond funds where hit most net redemptions wise with minus US$ 38 billion. Some of this money, however, found its way into Money Market funds, which were able to attract US$ 28.5 billion net new money. However, the trend into money market funds slowed from the previous month as the market waited, “on hold”.
Taking a look at Lipper Global Equity Classifications, Equity Global ex US (+13.7), Equity Japan (+5.3) and Equity Europe funds with plus US$ 3.4 billion accounted for the highest estimated net inflows, while Equity US funds (+US$ 1.7 billion) were able to halt the outflows trend as observed in the previous two months. On the lagging side we find Equity Global (-10.5), Equity Emerging Markets Global (-9.1) and Equity Asia Pacific ex Japan funds with a minus US$ 8.2 billion in estimated net outflows.
On the Bond Classifications side, Bond Global (-6.7), Bond USD High Yield (-6.1) and Bond Emerging Markets Global HC with minus US$ 5 billion led the outflows table while only Bond USD Mortgages attracted significant net new money with plus US$ 1.4 billion. Money Market funds USD led the overall inflows table with plus US$ 30.1 billion followed by Money Market EUR funds with plus US$ 16.4 billion net new money.
“Rising volatility in equity markets and an uncertain outlook for fixed income, due to mixed signals from the FED, combined with a significantly expansive monetary policy from the ECB have left their traces in the global investment funds market in August, with investors remaining put or moving to the side lines,” commented Otto Christian Kober, Lipper’s Global Head of Methodology and author of the report.
“Bond fund outflows seem to anticipate rising interest rates as equity markets retreat from their all time highs”, added Kober.