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Bond funds bounce back in Europe

Bond funds were the best-selling asset class in Europe during February – the 10th consecutive month of outflows from long-term mutual funds, according to Refinitive.

The firm’s latest European fund flows report said this was surprising given the low interest rate environment and the fact that securities markets rebounded in February.

Bond fund flows for the month were at €7.6bn, followed by real estate funds at €0.2bn, and other funds at €0.1bn.

Every other asset class experience outflows with the largest in money markets at €8.8bn. This was followed by alternative Ucits (€8.6bn), equity funds ($4.2bn), and mixed-asset funds (3.3bn).

“Within the current environment, European investors sold some of their positions in money market products. As a result, money market funds witnessed net outflows of €8.8bn for February,” the report said.

“ETFs investing in money market instruments contributed net outflows of €0.01 bn to these flows.”

Within the long term mutual funds category, global equities was the best-selling sector at €8.3bn. This was followed by emerging market global bonds hard currency (€3.5bn), corporate bonds EUR ($2.4bn), global hedged bonds USD (€2.3bn), and global emerging markets (€2.2bn).

However, medium term bonds USD suffered the highest outflows at €7.2bn. European equities followed at €5.1bn, eurozone equity at €2.2bn, US equities at €2.1bn, and bonds USD at €2.1bn.

Asset managers

Refinitive found that Natixis was the best-selling asset manager at €5.6bn during the month, followed by Link at €4.3bn, and Credit Mutuel at €1.9bn.

Blackrock was the best seller for bond funds at €4.5bn, followed by Pimco (€2.4bn), Vanguard (€1.5bn), Danske (€1.1bn), and AllianceBernstein (€1bn).

In terms of equities, UBS had the largest flows at €7.3bn, followed by Link (€4.3bn), KBC (€1.4bn), DWS (€1bn), and Lindsell Train (€0.5bn).

For funds domiciled in Luxembourg or Ireland, the best-selling fund in February was bond fund M&G Optimal Income A Accumulation at €1.17bn.

This was followed by three UBS ETFs tracking the MSCI All Country World Index in USD, CHF, and EUR currencies. These funds had flows of €1.16, €1.1bn, and €0.98bn respectively.


Jassmyn Goh

Jassmyn reported from Sydney to New York to Jakarta before joining Expert Investor. She was most recently Features Editor at Money Management and Super Review in Sydney.

Part of the Mark Allen Group.