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Although there has been talk of a "great rotation" out of
deflation plays such as bonds and into assets expected to do
well as inflation rises, investors continued to dump equities in
the third quarter, withdrawing a net $116 billion, eVestment's
data showed.
The firm, which tracks more than $37 trillion in institutional
money globally, aggregates data reported to it by asset managers
overseeing money for pension funds, insurers, sovereign wealth
funds and foundations.
This showed that fixed income products found favor after four
consecutive quarters of net outflows, attracting $66.8 billion
of net inflows to U.S. bonds and $18.3 billion into U.S.
corporate bonds.
Emerging market debt strategies attracted $12.4 billion.
Institutional assets invested in emerging market debt totaled
$480.5 billion at the end of the third quarter, a two-year high.
But investors pulled money from equity strategies for a seventh
consecutive quarter, with $80.3 billion withdrawn from U.S.
equity and $10 billion from global equity strategies.
An outlier was emerging market equities, which attracted $9.3
billion, with European investors the driving force behind the
inflows, eVestment said.
Overall, institutional asset managers attracted $19.7 billion in
the third quarter, although some clients, such as sovereign
wealth funds, remained net sellers.
These withdrew a net $5.2 billion, after outflows of $19.3
billion in the second quarter. Redemptions were led by $2.9
billion in net outflows from global equities.
Public funds pulled some $25.2 billion, and foundations and
endowments withdrew some $5.3 billion.
The firm also noted that whilst U.S. domiciled accounts reported
$123.6 billion in outflows, investors in Europe and the UK were
net buyers, with inflows of $41.7 billion and $3.7 billion
respectively.
"The uncertainty in Europe regarding the Brexit decision has led
to an influx of assets into cash management strategies, both in
the UK and Europe," eVestment said.
European cash management funds reported inflows of $23.3
billion, while UK cash management funds had net inflows of $9.3
billion.
(Reporting by Claire Milhench)
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