Bond funds surge in popularity as investors continue equity cut

Michael Bow
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EUROPEAN investors ploughed over €20bn (£16.3bn) more into bond funds in March, as fresh evidence reveals a rapid pullback of equities by institutional investors.

Around €36bn flowed into funds across Europe in March, according to figures from Lipper, with the majority of this cash rushing into bond funds.

In total, €21.5bn of the €35.8bn was allocated to bond funds, making them the best selling asset class in March. Scottish Widows Investment Partnership’s gilt fund was the best selling fund across Europe, according to the figures.

The rush for bond funds came amid fresh evidence yesterday suggesting UK investors such as pension funds are planning to further shun equity assets in favour of fixed income products like bond funds. A study from consultant Mercer showed most pension plans expect to cut their equity exposure in favour of company and government bonds.