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Institutional fund outflows accelerate to US$120b in Q2

[LONDON] Outflows from institutional asset managers accelerated in the second quarter to US$120 billion, data from research provider eVestment showed on Thursday, as investors dumped US stocks and actively managed equity strategies.

The firm, which tracks more than US$37 trillion in institutional money globally, uses data reported to it by asset managers overseeing money for pension funds, insurers, sovereign wealth funds and foundations.

The second quarter outflows were widely distributed across investor types and geographies, and up from a revised US$75.1 billion in the first quarter. "While still only a fraction of the trillions institutional investors control, this multi-billion-dollar outflow from traditional strategies and products in the first half of this year could be a sign investors are increasingly looking at alternative investment options or holding onto cash," eVestment said.

Equity strategies reported net outflows of US$110.1 billion, almost double the redemptions reported in the first quarter. Investors pulled US$72.1 billion from US equity, whilst actively managed equity strategies reported net outflows of US$111.1 billion.

Fixed income products reported net inflows of US$13 billion, a reversal of the US$1.1 billion of outflows reported in the first quarter. This was mainly driven by net inflows of US$38.8 billion into US bonds, as global fixed income strategies reported net outflows of US$12.2 billion.

UK fixed income attracted inflows of US$4.9 billion and UK stocks saw outflows of US$6.2 billion, but eVestment said the full extent of Britain's vote to leave the European Union on June 23 was not reflected in the figures.

Emerging market equities saw outflows for the fifth consecutive quarter, with redemptions over the last year totalling US$28.2 billion.

All types of institutional client were net sellers, with public funds dumping US$19.5 billion, corporates withdrawing US$18.8 billion and sovereign wealth funds redeeming US$15.8 billion.