European investors return to risk-on mode

During December the European mutual fund industry enjoyed net inflows of €3.9 bn into long-term mutual funds.

With regard to the overall flow pattern, it seemed European investors were returning to a risk-on mode, since equity funds (+€10.7 bn) were the best selling asset type in Europe for December, followed by alternative Ucits (+€3.2 bn), mixed-asset funds (+€1.5 bn), and real estate funds (+€0.4 bn).

On the other side of the table bond funds (-€10.7 bn) saw the highest net outflows, bettered by “other” products (-€0.8 bn) and commodity funds (-€0.3 bn).

These flows drove the estimated overall net sales of long-term investment funds up to a healthy €328.8 bn for the year 2015.

Money Market Products

After strong net inflows for October and November, money market funds faced net outflows of €20.1 bn for December. In spite of these outflows, the money market segment still brought in estimated overall net inflows of a healthy €57.3 bn for the year 2015. This flow pattern drove the overall sales of mutual funds in Europe to a positive €386.0 bn for 2015.

Money Market Products by Sector

Within the money market segment Money Market USD (+€7.8 bn) was the best selling sector for December, followed by Money Market GBP (+€3.0 bn) and Money Market EUR Leveraged (+€0.8bn). At the other end of the spectrum Money Market EUR (-€32.9 bn) and Money Market AUD (-€0.1 bn) suffered the highest net outflows.

Graph 1: Estimated Net Sales by Asset Type, December 2015 (€bn)

16-01-25 Graph 1 - ENS by Asset Type

Source: Thomson Reuters Lipper

Fund Flows by Sectors

Within the segment of long-term mutual funds Equity Europe (+€3.2 bn) was once again the best selling sector, followed by Equity Eurozone (+€2.4 bn), Equity Global (+€1.4 bn), and Equity Germany (+€1.3 bn) as well as Mixed-Asset USD Balanced-Global (+€1.1 bn).

Graph 2: Ten Top Sectors, December 2015 (€bn)

 16-01-25 Graph 2- Sector Flows

Source: Thomson Reuters Lipper

At the other end of the spectrum Bond USD High Yield (-€2.1 bn) suffered the highest net outflows from long-term mutual funds, bettered somewhat by Equity US (-€1.9 bn) and Bond Global High Yield (-€1.6 bn) as well as Bond EUR (-€1.0 bn) and Mixed-Asset GBP Conservative (-€0.9 bn).

Graph 3: Ten Bottom Sectors, December 2015 (€bn)

 16-01-25 Graph 3- Flop Sector Flows

Source: Thomson Reuters Lipper

Fund Flows by Markets

Single fund market flows (including those to money market products) showed a mixed picture for December, with only 17 of the 34 markets covered in this report showing net inflows. Ireland (+€7.0 bn), Luxembourg (+€6.9 bn), Germany (+€3.9 bn), Belgium (+€1.6 bn), and Sweden (+€1.5 bn) were the domiciles with the highest overall net inflows, while France—driven by money market products—was the single market with the highest net outflows (-€35.6 bn), bettered somewhat by Spain (-€3.5 bn) and Denmark (-€1.1 bn).

Graph 4: Estimated Net Sales by Country, December 2015 (€bn)

 16-01-25 Graph 2- Market Flows

Source: Thomson Reuters Lipper

Within the equity sector funds domiciled in Ireland (+€3.4 bn) led the table for December, followed by those domiciled in Germany (+€3.2 bn), France (+€1.5 bn), Luxembourg (+€1.1 bn), and Switzerland (+€0.9 bn). Equity funds domiciled in Belgium (-€1.0 bn), Norway (-€0.3 bn), and Finland (-€0.2 bn) stood at the other end of the table.

For bond funds, products domiciled in Norway (+€0.6 bn) led the table for December, followed by funds domiciled in Germany (+€0.3 bn), the Netherlands (+€0.2 bn), Sweden (+€0.2 bn), and Portugal (+€0.04 bn). Meanwhile, Luxembourg (-€5.3 bn) was the domicile with the highest net outflows from bond funds, bettered somewhat by funds domiciled in France (-€1.8 bn) and Ireland (-€1.4 bn).

With regard to mixed-asset products Luxembourg (+€1.6 bn) was once again the domicile with the highest net inflows, followed by funds domiciled in Germany (+€0.5 bn), Ireland (+€0.3 bn), Belgium (+€0.3 bn), and Italy (+€0.1 bn).On the other side of the table funds domiciled in the United Kingdom showed the highest net outflows (-€0.8 bn), bettered somewhat by funds domiciled in France (-€0.2 bn) and Jersey (-€0.2 bn).

Fund Flows by Promoters

Goldman Sachs, with net sales of €6.1 bn, was the best selling fund group for December overall, ahead of BlackRock (+€5.8 bn) and JPMorgan (+€4.0 bn).

Table 1: Ten Best Selling Promoters, December 2015 (€bn)

 16-01-25 Table 1 - Top Ten Promoter

Source: Thomson Reuters Lipper

Considering the single-asset bases, BlackRock (+€1.8 bn) was the best selling promoter of bond funds for December, followed by Fisch Asset Management (+€0.7 bn), KBC (+€0.5 bn), DNB (+€0.6 bn), and Swedbank (+€0.5 bn) as well as Eurizon Capital (+€0.4 bn). Within the equity space BlackRock (+€4.6 bn) stood at the head of the table, followed by Union Investment (+€1.2 bn), Deutsche Bank (+€1.1 bn), and Amundi (+€1.0 bn) as well as Vanguard (+€0.9 bn). The Spanish Santander (+€0.9 bn) was the leading promoter of mixed-asset funds, followed by DNCA Finance (+€0.6 bn), Blackstone (+€0.3 bn), and Allianz (+€0.2 bn) as well as Union Asset Management (+€0.2 bn).

Best Selling Funds

The ten best selling long-term funds gathered total net inflows of €5.3 bn for December. The split of the ten best selling funds by asset type was somewhat in line with the overall sales numbers, with the three equity products (+€1.8 bn) among the ten best selling funds accounting for the highest inflows on the table, followed by three mixed-asset funds (+€1.6 bn) and two absolute return funds (+€1.0 bn).

Table 2: Ten Best Selling Funds, December 2015 (Euro Millions)

16-01-25 Table 2 - Top Ten Funds

Source: Thomson Reuters Lipper

Detlef Glow, head of Lipper EMEA  Research.

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