Equities  

Investors retreat into cash in August

Investors across Europe retreated into cash in August as sales of equity and bond funds turned negative.

According to the latest data from Lipper, €3.5bn (£3bn) flowed into European funds in August mainly due to €5.9bn of net inflows into money market funds.

The flight to cash was concentrated in mainland Europe as the euro-denominated money market funds were the only ones to see net inflows, with both sterling and dollar-denominated versions seeing outflows.

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In addition to cash, investors also flocked to short-dated bond funds, which saw inflows of €1.8bn.

Detlef Glow, head of Europe, Middle East and Asia research, said: “The shift toward money market and short-duration products in euros may indicate an increasing risk aversion of European investors.”

According to Lipper’s early estimates of September flows, equity funds saw substantial inflows, topping €4.7bn in the Luxembourg and Ireland-domiciled funds examined.

However, bond funds continued to see outflows, of €2.2bn, as investors abandon the asset class in the face of rising yields and falling prices.