ECB action boosts equity sales

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The ECB's announcement on its Outright Monetary Transactions (OMT) plan helped boost investor confidence and led to a turnaround in fortune for equity funds, according to the latest industry sales data.

According to net sales figures released by the European Fund and Asset Management Association (EFAMA) for September, equity funds experienced their first inflows since March 2012.

Equity funds had experienced a torrid time over the past few months, marked by consistent outflows, but September data registered €3 billion of inflows over the month.

This is in stark contrast to the figures released for August which showed €10 billion of outflows.

While the sales data, which are collated from 26 European fund associations, showed an increased appetite for equity funds, there was a cooling of the consistent support for bond funds.

According to the latest data, inflows in bond funds fell to €9 billion in September. This compares with €18 billion of inflows in August and €24 billion in the July data.

Elsewhere, balanced funds fell back from the jump in inflows experienced in August. Inflows had risen to €6 billion under last month’s data but this dropped to €2 billion in September.

Interest in long-term Ucits – excluding money market funds – remained consistent with the previous month’s data with August and September both registering inflows of €13 billion for long-term Ucits.

Commenting on the turnaround in fortune for equity funds, Bernard Delbecque, director of economics and research at EFAMA, said:

‘The ECB’s decision as regards Outright Monetary Transactions and the approval of the European Stability Mechanism by Germany’s Constitutional Court enticed investor return to equity funds.’