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Europeans flock to stocks in October-Lipper

Mon, 13th Dec 2010 15:31

LONDON, Dec 13 (Reuters) - European investors rushed back into stocks duri
ng October, making equities the most popular asset class amid strengthening markets, Lipper FMI said on Monday.

Net sales of equity funds stood at 16.9 billion euros ($22.3 billion) during October, many times the 2.7 billion euros of inflows seen a month earlier and the highest since April 2006.

The surge in popularity for shares indicates investors are returning to riskier securities after sheltering in relatively safe assets such as bonds and cash-like instruments since the financial crisis.

'For a while there has been a feeling that there's a lot of money sitting on the sidelines in cash. Maybe this is some of it coming back,' said Ed Moisson, head of UK and cross border research at Lipper.

Much of the demand was for equity funds investing in emerging markets which attracted 7.5 billion euros, Lipper said.

European equity funds returned to positive sales, however, accounting for 1.3 billion euros of net inflows after losing 12.9 billion over the previous nine months, Lipper said.

The figures also suggest investors are starting to turn their backs on active fund managers. Exchange traded funds (ETFs) which track baskets of securities and are traded like shares, accounted for a quarter of equity fund sales.

When equity fund sales reached their peak of 22.6 billion euros in April 2006, ETFs accounted for just 2.3 percent of the total.

While bond funds saw overall demand slip during the month, emerging market bonds was the top selling sector at 5.32 billion euros over the month.

Fund manager Franklin Templeton was the highest selling investment manager in October, with sales of 3.2 billion euros, followed closely by Allianz/Pimco with 2.9 billion euros.

(Reporting by Chris Vellacott, editing by Sinead Cruise and David Cowell)

($1=.7580 Euro)

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