Barclays: Investors pulling billions from European funds and stocks

REUTERS/Phil
Noble

• Investors have pulled $35 billion from European
  equities this year and $51 billion from European funds,
  according to Barclays data.
• UK funds have seen outflows of over 6% of assets under
  management since the Brexit vote.

LONDON — Global investors are fleeing Europe in droves, according
to Barclays.

Analyst Magesh Kumar Chandrasekaran and the European Equity
Strategy team at the investment bank said in a note sent to
clients on Thursday that billions have been pulled from European
stock markets and funds in 2018.

Europe has seen the highest equity outflows so far this year of
any major market. Investors have pulled $35 billion from European
equities so far in 2018, the bank said

Barclays added: “European funds have seen redemptions for
twenty-one consecutive weeks, worth $51 billn since the start of
March this year. These redemptions have completely wiped out the
inflows Europe receivedsince 2017.”

Barclays

UK funds have suffered particularly badly. The bank writes:
“Within Europe, outflows from the UK have been more severe
compared to the rest of Europe. UK funds have seen outflows of
more than 6% of AUM since the Brexit referendum.”

UK funds have seen six weeks of fund outflows and $3.8 billion
was pulled in the last week alone, according to Barclays data.

Globally, flows into equities have been flat over the last month
and bonds saw $17 billion of inflows. $104 billion has been
invested into equities so far this year, compared to $65 billion
for bonds.

“Among regions, the US was the only major market to have received
meaningful equity inflows over the last four weeks,” the team
said. “As trade war-related uncertainties increased in May, EM
[emerging markets] funds saw $17bn worth of outflows. However,
last week, EM funds received inflows for the first time in eleven
weeks.”

Investors are also shifting money from active funds to passive
funds, with $82 billion shifting between the two strategies.