BlackRock thrives as Europe slides back into the red

The European funds industry ended 2011 in the red, to the tune of -€69.3bn, according to the latest Lipper Funds Flash.

The industry suffered a negative total for only the second time in the past decade, last time posting -€298bn in 2008. Lipper says 21 out of 33 markets suffered outflows.

For 2011, BlackRock was the group with the greatest fund sales (excluding money market funds) totalling €14.3bn. But with ETFs stripped out, Franklin Templeton’s bond funds topped the table, with €12.6bn.

In January, European funds suffered withdrawals of €17.3bn. This total worsened to €23bn when looking just at long-term funds (excluding money market activity).

Ed Moisson, Head of UK & Cross-Border Research at Lipper, says “both bonds (-€8.4bn) and equities (-€9bn) were broadly out of favour”. UK corporates booked €1.1bn  (favouring Insight, Pimco and M&G), global corporates €850m (Pimco again) and high yield (US$ and global funds together attracting €740m). Emerging markets have had a difficult year, but in December were the most popular equity choice with inflows of €380m.

“Investors’ attitudes to money market funds last month were broadly repeated this month, with money moving into £ and US$-denominated funds (€11.9bn and €4.6bn) and out of € funds (-€9.7bn).”

Funds with a global outlook were some of the most popular this year, be it global bonds (€16.4bn) or global equities (€6.3bn). This theme also played out in mixed asset funds, where funds with the ability to switch asset allocation across the spectrum and with an absolute return focus attracted €12bn.

“Interestingly it was these asset allocation products that stood up best (in terms of sales activity) with both global bonds and global equities suffering significant outflows over the second half of the year,” Moisson said.

Even among markets that saw positive activity for the year, there was an unsurprising gulf in investors’ activity over the two halves of the year. Cross-border funds attracted net sales of €90.4bn over the first half but ended the year with €16.1bn. The UK stood up pretty well, with sales for the year of €13.1bn (€14.1bn over the first half), and the Swiss market actually saw inflows over the second half to take its 2011 total to €9.8bn.

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