Collective Investments sees strong global demand for bonds
Global equity fund net inflows were lower in the second quarter while there was strong demand for bonds according to the latest International Investment Fund Association figures covering 41 countries.
“Equity inflows fell to $104 billion ($118 billion) but bonds rose from $69 billion to $98 billion,“ says Di Turpin chief executive of the Association of Collective Investments.
“This was the third successive quarter where the global industry has seen net inflows of over the $400 billion mark reflecting the popularity of investment funds such as unit trusts.”
The lower equity fund flows were mainly due to United States funds with flows falling from $79 billion to $42 billion while strong demand from the Asia/Pacific region saw flows there rising from $43 billion to $79 billion. Europe had a $6 billion net equity fund outflow as against $5 billion in the first quarter.
Bond fund net flows rose strongly to $98 billion from $69 billion in the first quarter of 2007. Net inflows to bond funds were $65 billion in the Americas and $15 billion in Europe in the second quarter, in line with the first quarter.
Most of the acceleration of bond fund flows was attributable to the Asia/Pacific region, with inflows of $17 billion in the second quarter after net outflows of $7 billion in the first quarter. Worldwide inflows to balanced funds were $59 billion in the second quarter, with $38 billion, or about two-thirds, in Europe.
Flows into money market funds were $139 billion in the second quarter, about in line with the rate of inflows over the previous three quarters. Net flows into money market funds in the Americas jumped to $103 billion in the second quarter from $70 billion in the first quarter. Inflows to European money market funds slowed to $35 billion the second quarter, compared to a net inflow of $70 billion in the first quarter.
Turpin says the at the end of the second quarter 49 percent of global investment fund assets were invested in equity funds, with 18 percent in money market funds and 10 percent in balanced or mixed fund assets.
Worldwide unit trust assets rose by 6,7 percent to $24,32 trillion at the end of the second quarter of 2007.
