Last updated: 08:56 / Tuesday, 17 March 2015
Lux and Irish Domiciled Funds

Bond Funds, With Projected Net Inflows of Around €24.3bn, the Best Selling Asset Class for February

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Bond Funds, With Projected Net Inflows of Around €24.3bn, the Best Selling Asset Class for February
  • The European funds industry enjoyed net inflows of €25.7bn from long-term mutual funds for January 2015. The overall net inflows for January: €44.1bn
  • According to the overall net flows, asset allocation (+ €10.6bn) was the best selling sector with regard to long- term funds but equities emerging markets suffered net outflows (-€2.8bn)
  • 10 of the 33 markets covered in this Lipper report showed net inflows
  • BlackRock, with net sales of €6.1bn, was the best selling group of long-term funds for January, ahead of UBS (+ €3bn) and State Street (+€2.2bn)
  • Bond funds—with projected net inflows of around €24.3bn—should be the best selling asset class for February

After a weak December the European mutual fund industry returned to its growth pattern in January, enjoying net inflows of €25.7bn into long-term mutual funds, according to Lipper Thomson Reuters data.

Single fund market flows for long-term funds showed a mixed but positive picture for January; 10 of the 33 markets covered in this report showed net inflows. The single market with the highest net inflows for January was Switzerland (+€4.1bn), followed by Germany (+€3.6bn) and Italy (+€3.3bn). Meanwhile, the United Kingdom (-€3.2bn), the Netherlands -€0.6bn), and Denmark (-€0.2bn) stood on the other side. BlackRock, with net sales of €6.1bn, was the best selling group of long-term funds for January, ahead of UBS (+€3bn) and State Street (+€2.2bn).

The majority of these flows (€25.7bn) were again seen into mixed-asset funds (+€15.6bn), followed by bond funds (+€7.6bn), equity funds (+€2.5bn), alternative/hedge products (+€1bn), and commodity funds (€0.7bn). In contrast, property funds (- €0.4bn) and “other” products (-€1.3bn) suffered net outflows for January.

In line with the long-term products money market products also enjoyed net inflows for January. In fact, money market funds (+€17.5bn) posted the highest net inflows of all asset types, while enhanced money market funds (+€0.8bn) also enjoyed net inflows.

These inflows lifted the overall net inflows for January to a healthy €44.1bn.

According to the overall net flows, asset allocation (+ €10.6bn) was the best selling sector with regard to long- term funds, followed by bonds EUR funds (+€4.7bn) and bonds EUR corporate investment-grade funds (+€3.7bn). At the other end of the spectrum equities emerging markets suffered net outflows (-€2.8bn), bettered somewhat by bonds USD corporate high yield funds (-€2.1bn) and bonds global high yield funds (-€1.7bn).

Early indicators for February activity

Looking at Luxembourg- and Ireland-domiciled long-term mutual funds, bond funds—with projected net inflows of around €24.3bn—should be the best selling asset class for February, followed by mixed-asset funds (+€12.1bn) and equity products (+€9.6bn). Even though these numbers are estimates, it seems European investors are again favouring bond funds.

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