Mutual Funds

 Global assets under management in the collective investment funds industry dropped by 1.44 trillion USD or minus 4% in August and stood at 34.7 trillion USD at the end of the month. Estimated net outflows accounted for 20.8 billion USD 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 36.4 trillion USD. The universe observed in these statistics encompasses all funds in the Lipper database excluding pension funds.

• All asset types posted negative average returns with Equity funds performing worst at minus 6.9% on average in USD terms, while Bond funds where hit most net redemptions wise with minus 38 billion USD. Some of this money, however, found its way into Money Market funds, which were able to attract 28.5 billion USD 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 3.4 billion USD accounted for the highest estimated net inflows, while Equity US funds (+1.7 billion USD) 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 8.2 billion USD 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 5 billion USD led the outflows table while only Bond USD Mortgages attracted significant net new money with plus 1.4 billion USD. Money Market funds USD led the overall inflows table with plus 30.1 billion USD followed by Money Market EUR funds with plus 16.4 billion USD 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. Bond fund outflows seem to anticipate rising interest rates as equity markets retreat from their all time highs.



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