Equity funds drew net inflows of €14.8bn for the month. Despite Ben Bernanke’s comments at the end of June on tapering quantitative easing and the subsequent sell off in bond markets, bond funds also continued to see strong inflows at €10.8bn bringing the year to date total to €94.9bn. Mixed asset funds also saw strong inflows at €8.8bn.
The only area of significant weakness was money market funds. They saw outflows of €1.4bn for July, bring the total for the year to €52.3bn. The sector was dealt another blow this week, as the European Commission unveiled new plans for money market funds, including more stringent capital requirements.
Critics of the proposal include the Association of the Luxembourg fund industry, whose chairman Marc Saluzzi said that, "the rules proposed by the Commission, especially those on eligible assets and diversification, are too stringent and even exceed the rules governing UCITS, which is unjustified."
Asset allocation funds were the strongest single group in July, according to Lipper, with €6.5bn of net inflows. North American equities continued to see strong inflows, at €4.3bn, despite many investors believing that they are now over-valued. High yield was the most popular fixed income asset class, a trend echoing recent Morningstar statistics, which showed the USD high-yield bond category with inflows of €3.5 billion, while inflows into global high-yield bond funds reached €2.1 billion.
