Investors channel €13bn into funds, says Morningstar

Investors have added €13bn in new assets to long-term European-domiciled funds in January 2012, giving the funds industry a positive start to the year.

Morningstar research shows that investors piled nearly €7bn into fixed-income funds in January. Investors demonstrated a hunger for yield, with Morningstar’s fixed-income categories of EUR High Yield Bond, EUR Corporate Bond, and USD High Yield Bond attracting a combined €6bn in the first month of the year.

In the equity sector, funds saw their first positive month since May 2011 with more than €3bn in inflows. Global emerging-markets funds had their strongest inflows since April 2011.

Aberdeen Emerging Markets achieved the greatest monthly inflow among funds in the global emerging-markets category, with €600m in new assets.

Templeton Global Bond suffered its fifth consecutive month of outflows in January. Investors redeemed more than €500m during the month, and the fund’s Morningstar Investor Return (money-weighted) was significantly below the fund’s total return.

Money market flows benefited two of France’s top three largest funds, with BNP Paribas enjoying its best month since March 2010, and Amundi its best since May 2011.

Passive funds had a strong month, as €1.2bn flowed into index funds.

Dan Lefkovitz, part of Morningstar’s European research team, said: “Buoyant markets have brought investors back into funds. Renewed appetite for risk and a sharp hunger for yield are evident. But the case of Templeton Global Bond is a sign that investors too often have a habit of buying high and selling low. Morningstar’s Investor Returns calculation shows that many of the fund’s investors have not captured its stated total return.”

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