European fund-flow trends, May 2017

May was the fifth consecutive month showing a positive picture for long-term mutual funds. European fund promoters enjoyed net inflows into bond funds (+€26.5 bn), followed by mixed-asset funds (+€12.7 bn), equity funds (+€4.6 bn), and alternative UCITS products (+€1.9 bn) as well as commodity funds (+€0.2 bn). Meanwhile, real estate products (-€0.1 bn) and, once again, “other” funds (-€1.6 bn) faced net outflows.

These fund flows added up to overall net inflows of €44.3 bn into long-term investment funds for May. ETFs contributed €9.1 bn to these flows.

Money Market Products
Opposite to the long-term products, money market products (-€0.8 bn) posted net outflows for May. In line with their actively managed peers ETFs investing in money market instruments also posted net outflows (-€0.01 bn).

This flow pattern led the overall fund flows to mutual funds in Europe to net inflows of €43.2 bn for May and €338.4 bn for 2017 so far.

Money Market Products by Sector
Money Market GBP (+€2.9 bn) was the best selling money market sector for May, followed by Money Market USD (+€0.8 bn) and Money Market EUR Leveraged (+€0.5 bn). At the other end of the spectrum Money Market EUR (-€3.6 bn) suffered the highest net outflows overall, bettered by Money Market Global (-€1.5 bn) and Money Market SEK (-€0.2 bn). Comparing this flow pattern with the flow pattern for April 2017 shows that European investors further increased their positions in the British pound sterling—the best selling money market sector for February, March, and April—and sold the euro.

Graph 1: Estimated Net Sales by Asset Type, May 2017 (€bn)

Source: Thomson Reuters Lipper

Fund Flows by Sectors
Within the segment of long-term mutual funds Bond Global (+€5.6 bn) was once again the best selling sector, followed by Equity Europe (+€3.5 bn), Bond Emerging Markets Global in Hard Currencies (+€3.0 bn), and Bond EUR Short Term (+€2.6 bn) as well as Equity Emerging Markets Global (+€2.6 bn).

Graph 2: Ten Top Sectors, May 2017 (€bn)

Source: Thomson Reuters Lipper

At the other end of the spectrum Equity US (-€3.3 bn) suffered the highest net outflows from long-term mutual funds, bettered somewhat by Equity UK (-€1.4 bn) and Equity Germany (-€1.1 bn) as well as Bond EMU Government Short Term (-€1.1 bn) and Equity US Small & Mid Cap (-€0.9 bn).

Graph 3: Ten Bottom Sectors, May 2017 (€bn)

Source: Thomson Reuters Lipper

Fund Flows by Markets (Fund Domiciles)
Single fund domicile flows (including those to money market products) showed in general a positive picture for May, with 22 of the 34 markets covered in this report showing net inflows and 12 showing net outflows. Ireland (+€19.5 bn) was the fund domicile with the highest net inflows, followed by Luxembourg (+€15.2 bn), France (+€5.8 bn), the United Kingdom (+€2.8 bn), and Germany (+€2.6 bn).On the other side of the table the Netherlands was the single fund domicile with the highest net outflows (-€1.7 bn), bettered somewhat by Belgium (-€1.1 bn) and Italy (-€0.9 bn).

Graph 4: Estimated Net Sales by Fund Domiciles, May 2017 (€bn)

Source: Thomson Reuters Lipper

Within the bond sector, funds domiciled in Ireland (+€10.6 bn) led the table for May, followed by those domiciled in Luxembourg (+€9.9 bn), France (+€3.0 bn), Switzerland (+€1.8 bn), and the United Kingdom (+€1.0 bn). Bond funds domiciled in Spain (-€0.9 bn), Denmark (-€0.7 bn), and Austria (-€0.4 bn) stood at the other end of the table.

For equity funds, products domiciled in Ireland (+€5.5 bn) led the table for May, followed by funds domiciled in France (+€1.9 bn), Luxembourg (+€1.8 bn), and Germany (+€0.6 bn) as well as Spain (+€0.5 bn). Meanwhile, Switzerland (-€2.0 bn), the Netherlands (-€1.7 bn), and Belgium (-€1.5 bn) were the domiciles with the highest net outflows from equity funds.

With regard to mixed-asset products Luxembourg (+€6.0 bn) was the domicile with the highest net inflows, followed by funds domiciled in the United Kingdom (+€1.6 bn), Italy (+€1.1 bn), Spain (+€1.0 bn), and Germany (+€0.8 bn). On the other side of the table funds domiciled in Jersey showed the highest net outflows (-€0.2 bn), bettered by funds domiciled in Poland (-€0.02 bn) and Slovenia (-€0.01 bn).

Ireland (+€2.0 bn) was the domicile with the highest net inflows into alternatives for May, followed by Luxembourg (+€1.0 bn), France (+€0.3 bn), and Germany (+€0.1 bn) as well as Spain (+€0.1 bn). Italy (-€1.6 bn), bettered by the United Kingdom (-€0.2 bn) and the Netherlands (-€0.02 bn), stood at the other end of the table.

Fund Flows by Promoters
BlackRock, with net sales of €7.4 bn, was the best selling fund promoter for May overall, ahead of PIMCO (+€5.2 bn) and Amundi (+€3.8 bn).

Table 1: Ten Best Selling Promoters, May 2017 (€bn)

Source: Thomson Reuters Lipper

Considering the single-asset bases, PIMCO (+€5.0 bn) was the best selling promoter of bond funds for May, followed by BlackRock (+€2.6 bn), Amundi (+€2.2 bn), and Deutsche Bank (+€1.3 bn) as well as Eurizon Capital (+€1.1 bn).

Within the equity space BlackRock (+€3.0 bn) stood at the head of the table for May, followed by Columbia Threadneedle (+€0.8 bn), Northern Trust (+€0.8 bn), and Vanguard Group (+€0.6 bn) as well as Invesco (+€0.6 bn).

M&G (+€1.1 bn) was the leading promoter of mixed-asset funds in Europe for May, followed by Allianz (+€0.9 bn), JP Morgan (+€0.8 bn), and Union Investment (+€0.7 bn) as well as Eurizon Capital (+€0.7 bn).

GAM (+€0.7 bn) was once again the leading promoter of alternatives funds for the month, followed by Insight (+€0.6 bn), Schroders (+€0.4 bn), and Invesco (+€0.4 bn) as well as Deutsche Bank (+€0.2 bn).

Best Selling Funds
The ten best selling long-term funds gathered at the share-class level total net inflows of €9.1 bn for May. The split of the ten best selling funds by asset type was somewhat in line with the overall sales numbers. Since bond funds dominated the overall sales numbers, it was not surprising that bond funds (+€3.7 bn) also dominated the sales table for the single funds, followed by equity funds (+€3.6 bn) and mixed-asset funds (+€1.8 bn).

Table 2: Ten Best Selling Long-Term Funds, May 2017 (€bn)

Source: Thomson Reuters Lipper

Detlef Glow is head of EMEA Research, Thomson Reuters Lipper

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