Flows of EUR28.7bn into long-term funds across Europe (excluding money market products) in February were the best for 16 months and the second best since April 2010, according to Ed Moisson (pictured), Head of UK & Cross-Border Research at Lipper.
Moisson’s leaves Lipper Fund Flash report says: “This reflected not only the greatest sales of bond funds (EUR19.5bn) since July 2005 — most notably high yield bonds reaching EUR6.5bn and beating last month’s all-time high — but also a 50% increase in equity fund sales (EUR6.3bn).
“Among equity funds, emerging market interest spread beyond global products (EUR2.3bn) into Asia Pacific (EUR1.4bn) and country-specific funds — most notably Russia and India (with EUR460m and EUR360m respectively). While global equity fund sales looked most impressive (EUR3.3bn) more than EUR1bn of this related to three new launches.
“The fact that inflows for the European industry as a whole (EUR16.3bn) were well down on January’s total (EUR31.1bn), is a result of the largest February withdrawals from cross- border money market funds over the past ten years. This is another sign that money is coming off the sidelines to find a longer-term home. Redemptions from cross-border money market funds totalled EUR13.4bn, while the European total was EUR12.4bn of redemptions, resulting from inflows of EUR6.7bn into these products in France.
“The International fund market (cross-border funds) accounted for 86% of inflows into Europe’s long-term funds, again forming the bedrock of activity for the industry as a whole. When looking for signs of a broader European revival of investor appetite, encouragingly local German sales activity has reached a 15-month high (EUR1.1bn), although equity funds are yet to find favour in this market.
“By contrast, the equity revival strengthened in the UK, with the first month of inflows (EUR360m) since June, although bond and mixed asset funds remain the most popular. The start to the year has been healthier in 2012 (EUR4.4bn) than in 2011 (EUR2.4bn).”