Inflows into European equity funds declined further in April following a record high in January as investors remain cautious, according to data from Morningstar.
Despite a market rebound over the last quarter, demand for European equity funds has slumped since January, and April was the weakest one-month period for equity fund inflows since October 2016.
Nevertheless, while European equity funds suffered heavy outflows, global and US fund categories remained resilient with solid demand, Morningstar said.
April also witnessed a comeback for long-short debt products, market-neutral equity funds, and global-macro funds.
The data also showed that:
• Actively-managed products pulled in combined net inflows of €16.2 billion compared with €4.5 billion of net subscriptions for open-end index funds and exchange-traded funds;
• Demand for alternatives funds picked up with April inflows of €5.6 billion, surpassing February and March levels;
• High-yield bond and corporate-bond funds were sold off in April, but demand for short-term, diversified, government and global emerging-markets bond categories drove €4.6 billion of inflows to bond funds.
Ali Masarwah, director for Emea editorial research at Morningstar, said: “The effects of rising market volatility in the first quarter has seen investors take a more cautious tone so far this year.
“While there were some signs of increasing confidence, inflows still remain lower than the record-breaking month of January.”
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