Black swan events wreak havoc on inflows

A total of €18bn was invested into Europe-based funds in the second quarter of this year, according to industry body EFAMA.

The figure is down sharply from the first quarter, when €30bn went into collectives, mostly due to large outflows from money market funds. A total of €30bn was pulled out of cash funds in the second quarter, compared with €9bn of withdrawals in the first quarter.

Net inflows into UCITS amounted to €48bn during the first half of 2011, slightly behind the €55bn recorded in the same period of 2010.

"This reduction came on the back of a stream of events, from the Arab uprisings and the Japanese earthquake, to concerns about sovereign debt risk, which affected investor confidence," said a spokesperson from EFAMA.

Money market funds experienced the highest asset decrease, falling by 3 per cent, followed by equity funds, which fell by 1.2 per cent.

Net assets of balanced funds enjoyed a leap in net asset growth, up 4.9 per cent during the quarter – a trend reflected in June’s sales data.

Bond funds also enjoyed an increase in net assets of 1.5 per cent during the quarter.