October net outflows from long term funds domiciled in Europe hit a level not seen since August 2011, when the eurozone crisis contributed to outflows of €35.3bn, notes Morningstar in its latest conclusion of flow trends in the region.
In the past month, equity funds saw €11.7bn withdrawn, bond funds €11.5bn withdrawn, and mixed assets funds €6.2bn withdrawn. Alternative funds saw €6.19bn leave.
Combined with negative market movements, the total industry assets represented by long term funds domiciled in Europe fell to €8.350trn from €8.636trn. Equity market performance alone stripped more than €223bn from the value of equity funds, Morningstar’s figures suggest.
Money market funds saw inflows of €52.8bn, described as a “record”, and an indication of investors seeking to reduce exposure to risk, the funds data provider noted.
Passively manged bond funds managed to eke out net inflows of some €1.7bn, but money came out of actively managed bond funds, as well as sectors such as technology and US growth funds, where both active and passive funds saw outflows. European and US small cap funds also saw outflows regardless of whether they were actively or passively managed. One sector that trended differently was actively manged global large cap, which attracted some €1.3bn.
Ali Masarwah, director, EMEA Editorial Research at Morningstar, said: “What started as a trickle in September evolved into a stampede in October. Investors exited European domiciled long-term funds in a scale last seen at the height of the eurozone crises in August 2011.”
Valerio Baselli, senior editor, EMEA Editorial Research at Morningstar, added: “The European fund market was yet again the scene of a sharp divide: While actively managed long-term funds bled heavily, shedding €36.4bn, index funds continued to garner net inflows, which stood at €1bn; well below previous months’ levels, but comfortably in positive terrain.”
By provider, UBS saw the best inflows in the active managed space, attracting some €3bn in October. Vanugard dopped the passive providers.
KBC and Carmignac were highlighted by Morningstar for suffering the heaviest outflows, for example, the KBC Bonds Strategic Corporate Bonds fund seeing €511m of net outflows, the Carmignac Sécurité seeing €927m of outflows, and Carmignac Patrimoine €1.56bn of outflows.
The Pimco GIS Income fund remains the largest open ended fund in Europe, with assets of some €51.7bn by the end of October, however, it has experienced outlows for much of the year, which has seen assets dwindle from some €60.5bn at the end of January.
The biggest index funds in the region remain the iShares Core S&P 500 ETF and the Vanguard S&P 500 ETF.