Bond sell-off fails to stifle fixed income flows while equities shed £1.6bn
In the first three quarters of the year, bond funds have attracted £11.6bn inflows, while investors have redeemed £15.2bn from equity strategies over the same time period.
Bond funds have attracted £11.6bn in the first three quarters of the year, while investors have redeemed £15.2bn from equity strategies over the same time period, according to the latest LSEG Lipper UK Fund Flows report.
Inflows into bond strategies have not been deterred by lacklustre returns, as UK market bond fund returns have remained relatively flat year-to-date, said Dewi John, head of research for the UK & Ireland at LSEG Lipper.
Appetite for bonds not abating in face of 'exaggerated' 5% Treasury yields
«This was supposed to be the year for bonds,» he added. «Shame that no-one told the bond market.
»September saw yields creep further up to pre-financial crisis highs on both sides of the Atlantic. This begs the question: when is a good entry point? Spoiler alert: it was not 1 January.
«For the first three quarters of the year, UK market bond funds are more or less flat (at -0.09%), as rising rates have continued to undermine fixed income portfolios.»
In September, only bonds (£1.2bn) and commodity (£16m) funds attracted net inflows. Aggregate equity flows were heavier last month, while money market outflows were lighter, and mixed-asset strategies and alternatives shed £1.1bn and £516m, respectively.
Investors pulled £1.6bn from equity funds last month alone, the heaviest redemptions of any asset class. Passive equity funds, however, brought in £516m, while bond ETFs attracted £1.6bn.
Although bond strategies attracted the highest amount of inflows in September, LSEG Lipper found this was an «overwhelmingly passive» story, as active bond
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