Multi-asset funds, long/short multi-strategy funds and flexible bond funds were the top-sellers in Europe over the last three years, receiving combined net inflows of €468.5bn*. This number accounts for more than half of the total net inflows into Europe-domiciled investment funds (including ETFs) between July 2014 and June 2017.
EM debt inflows approach €100bn
But where has the rest of the money gone? The answer is: into bond funds, and more specifically emerging market debt. Over the past three years, emerging market debt funds have seen total net inflows of €52.2bn, only some €13bn less than inflows into unconstrained/flexible bond funds.
During the previous three-year period, EM debt inflows were of a similar size, meaning that total net inflows have now reached almost €100bn over the past six years. This undermines claims by some (such as Ashmore’s head of research Jan Dehn) that emerging market debt inflows by Western investors have yet to pick up.
Three-year net inflows into investment-grade developed market corporate bonds fell just short of those into emerging market debt funds, reaching €50.4bn with inflows roughly split equally between active and passive funds. Inflows into developed market government bond funds still top €4.5bn over three years, though they have dropped into negative territory this year.
*All fund flows data mentioned in this stories were provided by Morningstar.