European investors bought further back into mutual funds and ETFs in September. Even as the global equity markets recovered further in a volatile environment, investors returned to long-term mutual funds because they expected the massive stimulus packages from central banks and governments globally to keep interest rates low and to foster global economic growth despite upcoming uncertainties from a possible second wave of COVID-19 lockdowns in Europe.
As a result, long-term mutual funds posted overall net inflows for the month. Equity funds (+€26.4 bn) were the best-selling asset type overall for September, followed by bond funds (+€6.7 bn), mixed-assets funds (+€3.0 bn), real estate funds (+€1.5 bn), and ”other” funds (+€1.2 bn), while commodities funds (-€0.1 bn) and alternative UCITS funds (-3.4 bn) were facing estimated net outflows.
These fund flows added up to overall estimated net inflows of €35.3 bn into long-term investment funds for September. ETFs contributed inflows of €5.9 bn to these flows.
Money Market Products
As the current market environment is still somewhat fragile, European investors bought back into money market products. As a result, money market funds enjoyed estimated net inflows for the month (+€2.7 bn), moving in the opposite direction in terms of flows than their actively managed peers. ETFs investing in money market instruments contributed estimated net outflows of €0.1 bn to the total.
This flow pattern led to estimated overall net inflows of €38.0 bn for September and overall estimated inflows of €297.1 bn year to date.
Money Market Products by Sector
Money Market EUR (+€14.4 bn) was the best seller within the money market segment, followed by Money Market NOK (+€0.04 bn) and Money Market JPY (+€0.01 bn). At the other end of the spectrum, Money Market USD (-€5.3 bn) and Money Market GBP (-€5.0 bn) suffered the highest estimated net outflows overall, while Money Market Global (-€1.1 bn) faced the third highest outflows in the money market segment.
Comparing this flow pattern with the flow pattern for August revealed that European investors sold further amounts of the pound sterling and the U.S. dollar, while buying back into the euro. In conjunction with the asset allocation decisions of portfolio managers, these shifts might have also been caused by corporate actions such as cash dividends or cash payments since money market funds are also used by corporations as replacements for cash accounts.
Graph 1: Estimated Net Sales by Asset Type, September 2020 (Euro Billions)
Source: Refinitiv Lipper
Fund Flows by Sectors
Equity Global (+€10.4 bn) was once again the best-selling sector in the segment of long-term mutual funds, followed by Equity U.K. (+€5.2 bn). Equity U.S. (+€3.2 bn) was the third best-selling long-term sector, followed by Equity Sector Information Technology (+€2.6 bn) and Equity Japan (+€2.4 bn).
Graph 2: Ten Top Sectors, September 2020 (Euro Billions)
Source: Refinitiv Lipper
At the other end of the spectrum, Equity Europe ex-U.K. (-€3.4 bn) suffered the highest net outflows in the segment of long-term funds, bettered by Equity Eurozone (-€1.3 bn), Bond EUR Corporates (-€1.3 bn), Commodity Blended (-€1.1 bn), and Alternative Multi Strategies (-€1.0 bn).
Graph 3: Ten Bottom Sectors, September 2020 (Euro Billions)
Source: Refinitiv Lipper
Fund Flows by Markets (Fund Domiciles)
Single-fund domicile flows (including those to money market products) showed, in general, a positive picture during September. Twenty-four of the 34 markets covered in this report showed estimated net inflows, and 10 showed net outflows. The U.K. (+€12.6 bn) was the fund domicile with the highest net inflows, followed by Ireland (+€10.3 bn), Luxembourg (+€8.0 bn), France (+€3.2 bn), and Switzerland (+€1.8 bn). On the other side of the table, Italy (-€1.9 bn) was the fund domicile with the highest outflows, bettered by Jersey (-€0.3 bn) and the Isle of Man (-€0.1 bn). It is noteworthy that the fund flows for France (+€2.5 bn) and Ireland (+€3.5 bn) were impacted by flows in the money market segment.
Graph 4: Estimated Net Sales by Fund Domiciles, September 2020 (Euro Billions)
Source: Refinitiv Lipper
Within the bond sector, funds domiciled in Luxembourg (+€2.9 bn) led the table, followed by Switzerland (+€1.9 bn), the U.K. (+€1.8 bn), Spain (+€0.7 bn), and France (+€0.5 bn). Bond funds domiciled in Germany (-€0.9 bn), Italy (-€0.4 bn), and Guernsey (-€0.3 bn) were at the other end of the table.
For equity funds, products domiciled in Luxembourg (+€10.5 bn) led the table, followed by the U.K. (+€7.9 bn), Ireland (+€6.4 bn), Germany (+€0.8 bn), and Sweden (+€0.7 bn). Meanwhile, Belgium (-€0.4 bn), France (-€0.2 bn), and the Isle of Man (-€0.1 bn) were the domiciles with the highest estimated net outflows from equity funds.
Regarding mixed-assets products, the U.K. (+€2.6 bn) was the domicile with the highest estimated net inflows for September, followed by France (+€0.8 bn), Ireland (+€0.4 bn), Belgium (+€0.4 bn), and Switzerland (+€0.3 bn). In contrast, Luxembourg (-€1.3 bn), Italy (-€0.5 bn), and the U.K. (-€0.5 bn) were the domiciles with the highest estimated net outflows from mixed-assets funds.
Guernsey (+€0.1 bn) was the domicile with the highest estimated net inflows into alternative UCITS funds for September, followed by Austria (+€0.04 bn), Germany (+€0.04 bn), Isle of Man (+€0.03 bn), and Jersey (+€0.03 bn). Meanwhile, Luxembourg (-€1.3 bn), Italy (-€0.5 bn), and the U.K. (-€0.5 bn) were at the other end of the table.
Fund Flows by Promoters
BlackRock was the best-selling fund promoter for September overall, with net sales of €17.1 bn, ahead of Man Investments (+€3.9 bn) and BNP Paribas Asset Management (+€3.0 bn). It is noteworthy that the inflows of BlackRock (+€8.3 bn) and BNP Paribas Asset Management (+€2.7 bn) were impacted by flows into money market funds.
Table 1: Ten Best-Selling Promoters, September 2020 (Euro Billions)
Source: Refinitiv Lipper
Considering the single-asset classes, BlackRock (+€2.4 bn) was the best-selling promoter of bond funds, followed by Fidelity International (+€1.0 bn), KBC (+€0.8 bn), DWS Group (+€0.7 bn), and Pictet (+€0.5 bn).
Within the equity space, BlackRock (+€6.1 bn) led the table, followed by Man Investments (+€3.8 bn), Capital Group (+€1.8 bn), UBS (+€1.7 bn), and JPMorgan (+€1.2 bn).
La Banque Postale (+€1.1 bn) was the leading promoter of mixed-assets funds in Europe, followed by Flossbach von Storch (+€0.6 bn), Vanguard Group (+€0.6 bn), Delen (+€0.5 bn), and Union Investment (+€0.5 bn).
Credit Suisse Group (+€0.4 bn) was the leading promoter of alternative UCITS funds for the month, followed by Societe Generale (+€0.2 bn), Jupiter (+€0.2 bn), BMO (+€0.2 bn), and PGIM (+€0.2 bn).
Best-Selling Funds
The 10 best-selling long-term funds, gathered at the share class level, experienced net inflows of €19.8 bn for September. The general fund-flows trend for the 10 best-selling funds was not in line with the overall fund-flows trend in Europe as equity funds dominated the ranks of asset types with regard to the 10 best-selling funds (+€13.0 bn), followed by bond funds (+€6.1 bn) and mixed-assets funds (+€0.7 bn). AMUNDI CA 07/10/2020 (C) (+€4.8 bn) was the best-selling fund share class for September.
Table 2: Ten Best-Selling Long-Term Funds, September 2020 (Euro Millions)
Source: Refinitiv Lipper
