European investment funds have slipped back into negative territory after a three-month positive run, according to Lipper’s latest monthly Fund Flash report on the region.
The sector saw outflows of €1.7 billion (£1.5 billion) in February driven by negative sentiment in the wake of further government action against toxic debt.
So-called “safe haven” funds were the winners for the month, with €2 billion flowing into commodity funds. Gold funds proved especially popular as a perceived shelter against inflation risk.
Equity funds suffered €2.8 billion of redemptions in February, but Lipper’s report says this is a low figure relative to the steep falls that occurred during some months of last year, with stockmarket losses on the same scale.
“Investors seem to have concluded that the market bottom is close, but they lack the confidence to take any risk,” the report says.
Government bonds dragged fixed income fund sales down for the month, but there was a noticeable uplift in the corporate investment grade sector. Overall outflows of €3.3 billion reversed the gains the asset class had seen in January.
The least popular sectors in February included hedge funds, European bonds and Japanese equities.
Net European fund assets fall by £962m