Equities  

Woodford and Hasenstab suffer huge outflows in October

Neil Woodford’s Invesco Perpetual Income fund saw outflows of more than €1bn (£0.8bn) in October following news of his resignation, more than any other fund in Europe, according to Morningstar.

The data provider’s latest fund flows data showed €1.1bn exited Mr Woodford’s Income fund and €574m was withdrawn from his High Income fund.

In addition, Franklin Templeton’s star bond manager Michael Hasenstab endured a fifth straight month of outflows from his Templeton Global Bond fund - Europe’s largest fund at €33.7bn - with €579m exiting the fund. His Templeton Global Total Return Bond fund also saw more than €200m withdrawn during the month, Morningstar said.

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Of the 15 biggest retail funds in Europe only three recorded net inflows in October, with Richard Woolnough’s M&G Optimal Income fund leading the way with €385m of new money.

Elsewhere Morningstar reported that net inflows remained subdued by fears of the effects of the withdrawal of quantitative easing in the US, expected to happen next year. However, this did not stop European equities recording their highest monthly level of inflows since Morningstar began tracking fund flow data in 2007.

Morningstar analyst Ali Masarwah said investors “bought heavily into equity funds” in October while commodities and bonds saw outflows.

He said: “Buoyant equity markets, a continued decline in volatility and a slight tightening of corporate credit spreads bore witness to the exultant mood of investors in October, as equity funds saw their strongest month of inflows so far this year.

“Inflows for long-term funds, however, still remain well below the levels seen prior to the Federal Reserve’s tapering scenario, which unleashed an indiscriminate selling spree in the third quarter of 2013.”