European investors began 2024 by allocating to equity and bond funds, according to data on asset flows from Morningstar.
The data provider’s figures for January 2024 showed that fixed-income strategies saw €31.8 billion of new inflows, the best monthly result for the asset class since July 2021.
Equity funds also saw a return to positive inflows after the outflows experienced in December. However, the flows were heavily weighted to passive equity funds which saw €19.4 billion in inflows during the month.
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Another big beneficiary in January was the Europe-domiciled long-term funds sector which experienced €24.9 billion of net inflows in the month. Money market funds saw similar levels of net inflows (€28 billion).
Not all funds enjoyed a positive January though. The outflows continued for allocation and alternative funds which suffered €7.6 billion and €2.1 billion in net outflows respectively.
Morningstar analyst Valerio Baselli, of the EMEA editorial research team, described the January figures as a “good start for the European asset management sector” after a “tumultuous 2023” and cited the expectation of early interest rate cuts ads the driving force behind the change in investor sentiment.
