UK equity funds were not the only single-country funds to see net outflows in May though: (passive) funds focusing on UK, Swiss, French and German equities saw combined net outflows in excess of €6bn.
At the same time, Pan-European equity funds registered net inflows of €8.3bn, the highest figure since July 2015.
Will these flows continue? If it’s up to Viviani, they will, as he sees the eurozone economy picking up while political risk has decreased. “Therefore, we consider increasing our allocation even further now,” he said.
Last week at an ECB-meeting in Portugal, ECB-president Mario Draghi seemed to share this outlook, saying “all the signs now point to a strengthening and broadening recovery in the euro area.”
But his comment triggered a ‘mini Taper Tantrum’ and sent shares down, as investors started fretting about premature rate rises.
The European equity market therefore isn’t as straightforward a bet as it may have seemed amid the euphoria right after the French elections.