European mutual fund flows have rocketed this year, according to a mid-year market review.
Total European net sales of mutual funds have reached €252 billion, their highest figure since 2006. This represents a 34% increase on the entire sales figures for 2013, according to Lipper’s European Fund Market Mid-Year Review 2014.
Lipper, a mutual fund market analysis and research company, also found cross-border funds performing exceptionally well, with the greatest share of sales at €171 billion year to date (YTD).
Domestically, Italy and Spain were the most successful European markets, with net sales of €25 billion and €15 billion YTD respectively, followed by the UK at €13 billion.
Lipper says that strong bond fund flows of €114 billion have dispelled last year’s fears of a bond bubble, and suggests that inflows may be on track to surpass the highs of 2012.
The research shows that investors in search of high yields are particularly attracted to go-anywhere flexible bond funds, which have received inflows of €16 billion. Emerging market bond funds, European high-yield bond funds, and European investment-grade bond funds are also proving popular, at the expense of US and UK bond funds.
Increasing interest in mixed-asset funds has drawn €62 billion of sales, just surpassing equities at €61 billion. However, the environment for equity funds continues to improve, with European and US equity funds receiving most attention.
In contrast to positive flows into developed world equity funds, emerging market equities will have disappointed fund groups, along with commodity sales. Asia ex-Japan faired worst, with €3 billion of net outflows. Lipper described interest in commodities funds as “paltry”, with €53 million of sales YTD, continuing a poor 2013 trend that saw a net outflow of €7 billion.
The best-selling equity fund this year belongs to Neil Woodford, who launched his own asset management company, Woodford Investment Management, in May 2014. Lipper recorded net sales of over €2 billion for the CF Woodford Equity Income fund so far in 2014.
The best-selling bond fund was Scottish Widows Gilt at €5.5 billion and the best-selling mixed fund was Allianz Global Investors Fund – Allianz Income and Growth, with €3.5 billion. BlackRock continued to top the European master groups by sales with €19 million so far this year, and also held the most assets at €359 million in June 2014.
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