The Financial & Risk business of Thomson Reuters is now Refinitiv

All names and marks owned by Thomson Reuters, including "Thomson", "Reuters" and the Kinesis logo are used under license from Thomson Reuters and its affiliated companies.

March 16, 2015

Monday Morning Memo: Asset Allocation Funds are the Products of choice of European investors for January 2015

by Detlef Glow.

REUTERS/Jose Miguel Gomez

REUTERS/Jose Miguel Gomez

After a weak December the European mutual fund industry returned to its growth pattern in January, enjoying net inflows of €25.7 bn into long-term mutual funds. The majority of these flows were again seen into mixed-asset funds (+€15.6 bn), followed by bond funds (+€7.6 bn), equity funds (+€2.5 bn), alternative/hedge products (+€1.0 bn), and commodity funds (€0.7 bn). In contrast, property funds (-€0.4 bn) and “other” products (-€1.3 bn) suffered net outflows for January.

Money Market Products

In line with the long-term products money market products also enjoyed net inflows for January. In fact, money market funds (+€17.5 bn) posted the highest net inflows of all asset types, while enhanced money market funds (+€0.8 bn) also enjoyed net inflows.

After strong outflows for December 2014, of all the fund sectors covered in the Lipper FMI database money market EUR (+€11.7 bn) saw the highest net inflows for January, followed by money market USD (+€2.9 bn) and money market GBP (+€2.4 bn). With outflows of €89 m money market HUF faced the highest net outflows in the money market segment, bettered somewhat by money market global (-€66 m) and money market AUD (-€60 m). These flows, especially if one compares December 2014 with January 2015, showed once again how active European investors use money market products in their asset allocation.

Graph 1: Estimated Net Sales, January 2015 (Euro Millions)

15-03 Graph 1 - ENS by Asset Type

Source: Lipper FundFile

These inflows lifted the overall net inflows for January to a healthy €44.1 bn.

Fund Flows by Sectors

According to the overall net flows, asset allocation (+€10.6 bn) was the best selling sector with regard to long-term funds, followed by bonds EUR funds (+€4.7 bn) and bonds EUR corporate investment-grade funds (+€3.7 bn) as well as funds of funds conservative (+€3.3 bn) and mixed-asset conservative funds (+€3.0 bn). At the other end of the spectrum equities emerging markets (-€2.8 bn) suffered net outflows, bettered somewhat by bonds USD corporate high yield funds (-€2.1 bn) and bonds global high yield funds (-€1.7 bn) as well as equities Greater China (-€1.3 bn) and equities United Kingdom (-€1.2 bn).

Graph 2: Ten Top Sectors, January 2015 (Euro Millions)

 15-03 Graph 2 - Top Ten Sectors by Flows

Source: Lipper FundFile

Fund Flows by Markets

Single fund market flows for long-term funds showed a mixed but positive picture for January: 10 of the 33 markets covered in this report showed net inflows. The single market with the highest net inflows for January was Switzerland (+€4.1 bn), followed by Germany (+€3.6 bn) and Italy (+€3.3 bn). Meanwhile, the United Kingdom (-€3.2 bn), the Netherlands (-€0.6 bn), and Denmark (-€.0.2 bn) stood on the other side.

Graph 3: Estimated Net Sales by Country, January 2015 (Euro Millions)

 15-03 Graph 3- Market Flows

Source: Lipper FundFile

Within the equity sector funds domiciled in the international fund hubs (Ireland and Luxembourg) (+€4.7 bn) led the table, followed by those domiciled in Switzerland (+€3.3 bn), Sweden (+€0.2 bn), Belgium (+€0.1 bn), and Italy (+€0.1 bn). Meanwhile, equity funds domiciled in the United Kingdom (-€3.5 bn), the Netherlands (-€1.1 bn), and France (-€0.5 bn) stood at the other end of the table.

The net inflows into bond funds were driven by funds domiciled in the international fund hubs (+€3.2 bn), followed by funds domiciled in Germany (+€1.7 bn), Norway (+€0.9 bn), and Spain (+€0.8 bn) as well as Italy (+€0.5 bn). On the other side the United Kingdom (-€1.1 bn) was the domicile with the highest net outflows from bond funds, bettered somewhat by funds domiciled in Sweden (-€0.4 bn) and Denmark (-€0.1 bn). A total of eight countries showed net outflows from bond products.

With regard to mixed-asset products, the flows were driven by net inflows into funds domiciled in the international fund hubs (+€6.0 bn), followed by those domiciled in Italy (+€3.0 bn), Germany (+€2.5 bn), the United Kingdom (+€1.3 bn), and Spain (+€0.8 bn). Overall, only 10 of the 33 countries monitored in the FMI database showed net outflows from mixed-asset products. Portugal (-€27 m) showed the highest net outflows from mixed-asset products.

Fund Flows by Promoters

At the promoter level BlackRock, with net sales of €6.1 bn, was the best selling group of long-term funds for January, ahead of UBS (+€3.0 bn) and State Street (+€2.2 bn).

Graph 4: Ten Best Selling Groups, January 2015 (%)

15-03 Table 1 - Top Ten Groups

Source: Lipper FundFile

Considering the single-asset bases, BlackRock (+€2.5 bn) was the best selling promoter of bond funds for January, followed by State Street (+€0.8 bn) and Vanguard (+€0.7 bn). Within the equity space BlackRock (+€3.9 bn) stood at the top of the table, followed by UBS (+€2.2 bn) and State Street (+€1.4 bn). In addition, Banco Popolare Società Cooperativa (+€1.1 bn), Allianz Global Investors (+€1.1 bn), and Standard Life Investments (+€1.1 bn) were the best selling promoters of mixed-asset products.

Table 1: Ten Best Selling Funds, January 2015 (Euro Millions)

15-03 Table 2 - Top Ten Funds

Source: Lipper FundFile

Article Topics

Get In Touch


We have updated our Privacy Statement. Before you continue, please read our new Privacy Statement and familiarize yourself with the terms.×