MILAN, Italy – Mutual Funds in Italy have lost 1.889 billion Euros since the start of July, entering what many consider a dark period for investors. In June as opposed top July the loss was 1.176 Euros.
The current trend appears to differ greatly from what was seen between January and July of this year when there was actually a positive set of numbers measuring around 603 million Euros. Yet, most experts point out that this number was always way to close to the baseline to hold out in case of negative trends.
Bonds remained positive ( +192 million , +59 million from the previous month , recorded inflows from January to 11.221 billion ) .
Well hoses, with a good collection for 94 million ( +683 million in June , +4.154 billion YTD ), while it stops the bleeding from cash funds ( -2.053 billion from -2.294 billion the previous month ; January, cash funds have left the street well 15,768,000,000 ) .
Collapse of the Cash Funds
“It may be that the cash be used to repay debt, reduce leverage , “says Luke Vaiani , responsible performance and management of closed funds at Fondaco Sgr. “Some of the outflows is explained by the fact that investors buy securities directly ( Bot ) and investment grade corporate bonds.”
Luke Vaiani points out that “as long as rates remain so low , investors will focus on hard cash products .
On the other hand, “if you go to a scenario of low growth and structural deflation risk , “adds Vaiani “moving funds from cash may not be a far-sighted.”
Luke Vaiani continues ,”There is no surprise that equity funds reap little: there is no clear direction in which the economy is and it is reasonable to avoid too strong bets in volatile asset class .” Hence , the preference for flexible and balanced funds.
In terms of Italian funds, they continue to suffer redemptions ( -1.417 billion from -1.161 billion in June ; -3.078 billion YTD ) , while funds have seen outflows of foreign law for 472 million (-15 million +3.681 billion in June and YTD ) .