2021 was a fairly risk-on year for European fund investors, despite expectations that economic conditions would result in contrary behaviour.
A record €724.1 billion poured into the industry over the course of the year, despite economic uncertainty caused by the Covid-19 pandemic, supply chain shortages, and rising inflation.
It was the second year in which investors contradicted expectations, according to a December fund flow report by Refinitiv.
Government and central bank stimulus is likely to have contributed to a sense of confidence, according to the report’s author.
Equities were the best-selling asset type for the year, with most fund flows heading into mutual funds. Inflows into exchange-traded vehicles reached €160.9 billion, climbing to record figures, and topping the all-time high for the vehicle in Europe in 2019 – €106.7 billion – by €54.2 billion.
“These strong inflows are somewhat surprising, since companies and investors had to weather the uncertainty and impacts caused by the Covid-19 pandemic, which should have led under normal circumstances to a more cautious behaviour from investors,” said Detlef Glow, head of Emea research at Refinitiv Lipper.
“Therefore, it can be assumed that the massive financial and fiscal actions taken by governments and central banks around the globe have boosted the confidence of investors to stay in a risk-on mode,” he added.
Long term investment products such as equities, bonds, and cash equivalents, had significantly high inflows totalling €718.9 billion, whereas money market funds had just €5.2 billion additional inflows.
Funds pouring into long-term mutual funds climbed to €718.9 billion, while equity global was the best-selling sector amongst long-term funds.
Luxembourg was the region with the highest inflow figure of €329.1 billion, followed by Ireland (€204.3 billion) and the UK (€40.5 billion).
BlackRock was the best-selling fund manager for Europe over the period. It had €107.7 billion in inflows, leading both JPMorgan and Vanguard.
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