by Detlef Glow.
The European mutual funds industry enjoyed overall net inflows of €38.1 bn into long-term mutual funds for June 2014. The net inflows for June were driven mainly by flows into bond funds (+€19.2 bn), followed by mixed-asset funds (+€12.1 bn) and equity products (+€6.0 bn). Also, property products (+€0.8 bn) as well as alternative/hedge funds (+€0.5 bn) saw net inflows, while commodity funds (-€0.001 bn) and funds from the “other” peer group (-€0.5 bn) faced outflows.
Over the course of the first six months of the year the European fund industry enjoyed net inflows of €244.1 bn into long-term mutual funds. With net inflows of €114.4 bn, bond funds were the main contributor, followed by mixed-asset funds (+€62.5 bn) and equity products (+€60.7 bn) as well as property funds (+€0.8 bn), alternatives/hedge funds (+€0.3 bn), and funds from the “other” peer group (+€0.3 bn), while commodity funds (-€0.4 bn) was the only asset class that suffered net outflows.
Money Market Products
In addition to the long-term mutual funds, enhanced money market products enjoyed net inflows (+€0.3 bn), while money market funds themselves faced net outflows of €10.9 bn for June. Despite these outflows, money market funds still posted net inflows of €6.0 bn for the first half of 2014.
While money market GBP saw the highest net inflows (+€0.7 bn) for June, money market EUR once again suffered the highest net outflows (-€10.3 bn) of all the fund categories covered in the FundFile database.
Graph 1: Estimated Net Sales, June 2014 (Euro Millions)
Source: Lipper FundFile
Fund Flows by Sectors
With regard to long-term funds, asset allocation products (+€6.6 bn) were the best selling asset class, followed by bonds flexible (+€3.1 bn) and bonds global currencies (+€2.9 bn) as well as equities Europe (+€2.9 bn) and mixed-asset balanced (+€2.7 bn). At the other end of the spectrum equities global (-€3.4 bn) suffered net outflows, bettered by bonds GBP corporate investment-grade (-€2.6 bn) as well as bonds USD corporate high yield (-€1.8 bn), guaranteed funds (-€1.0 bn), and equities Germany (-€0.8 bn).
The asset allocation sector (+€39.7 bn) was the best selling long-term fund sector over the course of 2014 so far, followed by equities Europe (+€19.0 bn), bonds flexible (+€15.6 bn), mixed-asset conservative (+€13.6 bn), and bonds EUR (+€13.5 bn). On the other side of the table guaranteed funds (-€9.5 bn), equities Pacific ex-Japan funds (-€3.4 bn), and bonds USD (-€3.2 bn) suffered the highest net outflows for the first half of 2014, bettered somewhat by bonds GBP corporate investment grade (-€2.9 bn) as well as equities Greater China (-€2.9 bn).
Fund Flows by Markets
The fund market inflows for long-term funds were dominated by funds domiciled in the international cross-border hubs (+€24.7 bn), followed by funds domiciled in Italy (+€4.3 bn), the United Kingdom (+€3.0 bn), and Spain (+€3.0 bn). Meanwhile, Norway (-€1.2 bn), Belgium (-€0.7 bn), and The Netherlands (-€0.6 bn) stood on the other side.
Graph 2: Estimated Net Sales by Country, June 2014 (Euro Millions)
Source: Lipper FundFile
The inflows into equity funds were also dominated by international cross-border funds (+€3.6 bn), followed by funds domiciled in the United Kingdom (+€2.7 bn), Italy (+€0.7 bn), Spain (+€0.4 bn), and Germany (+€0.3 bn). Funds domiciled in Norway (-€1.1 bn), The Netherlands (-€0.3 bn), and Belgium (-€0.3 bn) stood at the other end of the table.
In the bond sector funds domiciled in the international cross-border hubs (+€15.3 bn) dominated the scene, followed by funds domiciled in Spain (+€1.9 bn), Switzerland (+€1.3 bn), and Germany (+€0.9 bn) as well as Sweden (+€0.7 bn). On the other side the United Kingdom (-€1.7 bn) was the domicile with the highest net outflows from bond funds, bettered somewhat by funds domiciled in Belgium (-€0.6 bn) and The Netherlands (-€0.3 bn).
Fund Flows by Promoter
BlackRock, with net sales of €2.7 bn, was the best selling group of long-term funds for June, ahead of UBS (+€2.1 bn), Woodford Investment (+€2.1 bn), Intesa SanPaolo Group (+€2.1 bn), and Prudential/M&G (+€1.7 bn). BlackRock (+€19.3 bn) was the best selling group for first half 2014, ahead of UBS (+€11.0 bn) and Den Norske Bank (DNB) (+€9.3 bn). It is noteworthy that the success of DNB was related to the inflows into three institutional funds during January and February.
Graph 3: Market Share of the Ten Best Selling Groups, June 2014 (%)
Source: Lipper FundFile
On a single-asset basis BlackRock (+€2.7 bn) was the best selling promoter of bond funds for June, followed by UBS (+€1.9 bn) and Royal Bank of Canada (RBC) (+€1.2 bn). Within the equity space Woodford Investment (+€2.1 bn) stood at the top of the table, followed by Prudential/M&G (+€1.2 bn) and KBC (+€1.1 bn).