With the intention of pumping billons of euro back into European bank’s coffers, the ECB launched the first round of its LTRO in December last year. At the time there were 523 applicants which received a total of €489bn. The second round of the LTRO, which was launched on 28 February, had 800 applicants which will receive €529.5bn.
The European Fund and Asset Management Association said the LTRO had played a big part in returning confidence to European investors, which in turn has meant an increase in net flows into Ucits funds over the quarter.
Net sales leapt to €91bn during the first quarter, a significant jump from the €50bn of outflows recorded in the last quarter of 2011.
The inflows were seen across all investment fund sectors, according to Efama, the most significant of which were into bond funds, which raked in €49bn during the quarter – up from outflows of €11bn in the previous quarter. Meanwhile, equity funds registered €9bn, up from outflows of €29bn in Q4 2011, while balanced funds recorded inflows of €8bn compared to net outflows of €9bn.
Efama said, while overall the flows into Ucits funds are positive, helped by the ECB action, “the low net sales of equity funds coupled with large net sales of bond funds highlight an element of investor caution remains”.
Looking at fund domicile, Efama found 22 countries recorded an increase in net assets of Ucits during the quarter. Of the large fund domiciles, the UK saw the steepest growth recording an increase of 7.2%, followed by Ireland with 6.2%, France with 6%, Luxembourg with 5.9% and Germany with 5.4%.