Europe AM industry pushes inflows 95% up

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Even allowing for some outflows in equities late in the summer, a total of €367bn in European estimated net sales for 2014 represented an increase of 95% from 2013 and fell just shy of the best ever total of €372bn taken in 2006, Lipper’s 2014 review has revealed.

Cross-border fund flows were strong, with some €179bn net being collected for the year (not including the net flows of money market funds).

Looking at specific countries, Italy—with a total of €47bn for the year—dominated the European flows. Spain, which came in second for most of the year, was finally pipped to the post by Germany in a very close result (+€20.3bn and +€20.9bn, respectively), and the United Kingdom came in sixth with €13bn of net flows; an anaemic last quarter pushed the UK down in the rankings.

Despite the constant threat of increasing interest rates, bond funds had their seventh consecutive year of growth, with a total of €164bn of estimated net sales for 2014; they were dominant over equities, which could only muster €60bn by comparison, the report also highlighted.

The success of mixed-asset funds was a continuing theme throughout Europe, with €125bn net being collected during the year. However, the number of new mixed-asset fund launches was down for the first time since 2010, suggesting the trend may now possibly have hit its peak. Commodity funds remained a loser in a difficult macro environment, with some €2.2bn of net outflows during the year.

On a sector basis there was still a strong income & yield theme, which was reflected in net flows. Broad-based European corporate bond funds proved very popular, collecting some €58bn across various iterations. This was also interspersed with preferences for larger-cap “safe-haven” equities in the US and Europe.

The mixed-asset trend, which includes flows into fund-of-funds portfolios of varying risk, also reflected Europe’s preference for broad-based diversification in an increasingly fraught geopolitical environment. Higher-risk equities and emerging market regions (other than EM bonds) were barely represented in the 25 top sectors.

The top groups by sales contained a number of regulars. BlackRock, with €29bn of estimated net sales for 2014, easily headed up the table. There were a number of groups around the €16bn ENS mark for 2014, but JPM—with the lowest number of funds of this total (just over 200 funds) had the best concentration average.

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