Continued uncertainty holds back Ucits sales, Efama finds

Ucits funds were hit by continued net outflows in October after the poor economic outlook dominated investors’ concerns, according to figures from the European Fund and Asset Management Association (Efama).

However, the trade association adds that the rate of decline eased from previous months as investors experienced renewed hope that the eurozone debt crisis would be resolved.

Efama’s figures show Ucits funds in Europe excluding Belgium, the Netherlands and Liechtenstein witnessed €29.8 billion (£25.5 billion) in net outflows during October. This was driven by redemptions from money market and equity funds.

October’s fall is an improvement from the €48.9 billion of net outflows seen in September. Ucits sales have sat in negative territory since the summer, with May being the last month to post net gains.

Bernard Delbecque, director of economics and research at Efama, says: “The net sales figures for Ucits showed mixed signals in October.

“On the one hand, Ucits saw reduced net outflows as expectations of a conclusive plan to resolve the sovereign debt crisis provided some hope to investors.”

During October, G20 finance ministers met in Paris to discuss possible solutions to the eurozone debt crisis. Later in the month, European leaders unveiled their three-pronged strategy to contain the crisis.

But Delbecque adds: “On the other hand, net withdrawals remained at a high level with all categories affected as uncertainty lingered and the economic outlook deteriorated”.

European leaders are still looking for a solution to the crisis. The leaders of the 27 European Union countries met last week to discuss closer fiscal union, but the measures unveiled at the summit are widely viewed as being inconclusive.

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