Europe-domiciled long-term funds experienced net inflows of €54 billion in May 2024, marking the best monthly performance of the year to date, according to Morningstar.
According to the research, this surge was driven by a significant rebound in equity funds, which attracted nearly €30 billion in net inflows. The findings also have also revealed that both passive and active strategies benefitted from this resurgence.
Fixed-income strategies continued their positive trajectory, with just over €30 billion in net inflows. This marked the 18th month of positive flows out of the last 19, showcasing sustained investor interest in these safer investment vehicles. Long-term funds classified under Article 8 saw €18.7 billion in net inflows, their best monthly result since December 2022. In contrast, Article 9 products faced net outflows of €617 million, highlighting a divergence in investor sentiment within sustainable investment categories.
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Conversely, allocation and alternative funds struggled, with net outflows of €4.1 billion and €1.2 billion, respectively. Despite these challenges, the overall assets in long-term funds domiciled in Europe grew to €11.666 trillion by the end of May, up from €10.994 trillion at the end of April, indicating a strong underlying growth trend.
Other key takeaways include the dominance of global large-cap blend equity as the top-selling Morningstar Category for the month, followed by global large-cap growth and US large-cap blend equity categories. In contrast, UK large-cap equity funds and global emerging-markets equity funds experienced the highest net outflows, with €2.4 billion and €1.6 billion in net redemptions, respectively.
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Among asset-gatherers, iShares led the rankings, followed by JP Morgan. On the other end, Credit Suisse, Columbia Threadneedle, and Aviva were the biggest laggards. Money market funds also experienced net outflows of €3.7 billion.
Valerio Baselli, senior international editor, Morningstar, commented: “Global stocks rebounded strongly in May from the prior month’s losses, with overall developed markets outperforming emerging markets. In this context, investors showed positive sentiment on stocks, with equity funds taking in €30 billion, the best monthly result in terms of flows since January 2022.” The fixed-term bond category topped sales in May, followed by euro ultra-short-term bond funds, he added.
