Q3 sees highest fund inflows in two years

Global inflows into investment funds were the highest in over two years in the third quarter of 2010, according to the European Fund and Asset Management Association (Efama).

At €17.4 trillion (£15 billion), inflows reached their highest levels since the first quarter of 2008 as outflows from money markets began to slow and inflows into bond funds pushed upwards.

Long-term funds experienced a positive net cash flow for the sixth consecutive quarter, reaching €190 billion. Two-thirds of this was due to €128 billion invested in bond funds in the third quarter. (article continues below)

Despite continuing to experience negative cash flows, outflows from money markets began slowing in the third quarter to €34 billion, as opposed to €194 billion in the second quarter.

This was largely attributed to an improvement in American markets, which saw outflows shrink by €121 billion between the second and third quarters.

America continued to hold the largest share in the world funds market, with 47.5%.

Equity funds comprised 40% of worldwide investment fund assets by the end of the quarter.