European investors show appetite for risk

Lipper’s Detlef Glow, head of research EMEA, looks at European fund flow trends in October. 

During October the European mutual fund industry enjoyed net inflows of €20.6 bn into long-term mutual funds. In contrast to the previous month European investors seemed to have an increasing appetite for risk; equity funds (+€15.7 bn)  were the best selling asset type in Europe for October, followed by alternative UCITS (+€4.1 bn), mixed-asset funds (+€1.9 bn), and bond funds (+€0.7 bn) as well as real estate funds (+€0.3 bn) and commodity funds (+€0.02 bn). ”Other” products (-€2.1 bn) were the only asset type that faced net outflows for October.

These flows drove the estimated overall net sales of long-term investment funds up to a healthy €294.9 bn for the year to date.

Money Market Products

After net outflows for September, money market products enjoyed net inflows of €25.1 bn for October.

These inflows for the money market segment brought the estimated overall net sales of money market products to a healthy €45.5 bn for the year to date. This flow pattern drove the overall sales of mutual funds in Europe to a positive €340.4 bn for the first ten months of the year.

Money Market Products by Sector

Within the money market segment Money Market EUR (+€14.3 bn) was the best selling sector for October, followed by Money Market GBP (+€6.9 bn) and Money Market USD (+€4.1 bn). At the other end of the spectrum Money Market SEK (-€0.2 bn) and Money Market PLN (-€0.1 bn) suffered the highest net outflows.

Graph 1: Estimated Net Sales by Asset Type, October 2015 (Euro Billions)

15-11-23 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 the best selling sector, followed by Equity Global (+€2.4 bn), Equity Emerging Markets (+€2.4 bn), and Bond Global High Yield (+€1.6 bn) as well as Alternative Equity Market-Neutral (+€1.5 bn).

 

Graph 2: Ten Top Sectors, October 2015 (Euro Billions)

15-11-23 Graph 2- Sector Flows

Source: Thomson Reuters Lipper

 

At the other end of the spectrum Bond Emerging Markets in Local Currencies suffered the highest net outflows (-€1.4 bn) from long-term mutual funds, bettered somewhat by Unclassified (-€1.3 bn) and Mixed-Asset GBP Conservative (-€1.2 bn) as well as Bond EUR Short Term (-€1.1 bn) and Bond USD High Yield (-€0.8 bn).

 

Graph 3: Ten Bottom Sectors, October 2015 (Euro Billions)

15-11-23 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 October, with 15 of the 34 markets covered in this report showing net inflows. France (+€19.4 bn), Ireland (+€17.0 bn), Luxembourg (+€7.8 bn), Germany (+€2.2 bn), and Belgium (+€0.7 bn) were the domiciles with the highest overall net inflows, while the United Kingdom was the single market with the highest net outflows (-€1.7 bn), bettered by the Netherlands (-€0.5 bn) and Spain (-€0.3 bn).

Graph 4: Estimated Net Sales by Country, October 2015 (Euro Billions)

15-11-23 Graph 4- Market Flows

Source: Thomson Reuters Lipper

Within the equity sector funds domiciled in Luxembourg (+€6.7 bn) led the table for October, followed by those domiciled in Ireland (+€3.0 bn), Germany (+€1.4 bn), Belgium (+€1.4 bn), and France (+€1.2 bn). Equity funds domiciled in the United Kingdom (-€0.5 bn), Poland (-€0.04 bn), and Liechtenstein (-€0.004 bn) stood at the other end of the table.

For bond funds, products domiciled in Ireland (+€2.9 bn) led the table for October, followed by funds domiciled in Germany (+€0.4 bn), France (+€0.3 bn), Norway (+€0.2 bn), and Belgium (+€0.2 bn). Meanwhile, the Netherlands (-€0.8 bn) was the domicile with the highest net outflows from bond funds, bettered somewhat by funds domiciled in the United Kingdom (-€0.7 bn) and Spain (-€0.6 bn).

With regard to mixed-asset products Luxembourg (+€1.8 bn) was once again the domicile with the highest net inflows, followed by funds domiciled in Germany (+€0.5 bn), Ireland (+€0.3 bn), Italy (+€0.3 bn), and Spain (+€0.1 bn).On the other side of the table funds domiciled in the United Kingdom showed the highest net outflows (-€1.1 bn), bettered by funds domiciled in Switzerland (-€0.1 bn) and Malta (-€0.1 bn).

Fund Flows by Promoters

BlackRock, with net sales of €5.7 bn, was the best selling fund group for October overall, ahead of Aviva (+€5.7 bn) and Amundi (+€4.4 bn).

 

Table 1: Ten Best Selling Promoters, October 2015 (Euro Billions)

15-11-23 Table 1 - Top Ten Groups

Source: Thomson Reuters Lipper

 

Considering the single-asset bases, BlackRock (+€3.1 bn) was the best selling promoter of bond funds for October, followed by JP Morgan (+€0.9 bn), UBS (+€0.9 bn), Aviva (+€0.8 bn), and KBC (+€0.7 bn). Within the equity space BlackRock (+€2.7 bn) stood at the top of the table, followed by KBC (+€1.3 bn), Vanguard (+€0.9 bn), and JP Morgan (+€0.8 bn) as well as Schroders (+€0.7 bn). The French DNCA Finance (+€0.5 bn) was the leading promoter of mixed-asset funds for October, followed by JP Morgan (+€0.4 bn), Pioneer Investments (+€0.4 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 net inflows of €3.7 bn for October. The split of the ten best selling funds by asset type was somewhat in line with the sales numbers, with four equity products within the ten best selling funds (+€1.6 bn) accounting for the majority of the inflows on this table, followed by four bond funds (+€1.4 bn), a mixed-asset fund (+€0.4 bn), and a mixed-asset/absolute return fund (+€0.4 bn).

 

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

15-11-23 Table 2 - Top Ten Funds

Source: Thomson Reuters Lipper

 

 

 

 

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