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Matias Mottola, Morningstar

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Flows into European fixed-income funds reach record in H1 2017

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Europe-domiciled bond funds received net inflows of EUR29 billion in June, the second-highest monthly tally since Morningstar started to publish European asset flows figures in 2007.

Total inflows for bond funds rose to EUR152.2 billion in the first six months of the year, a new high for semi-annual net inflows into the asset class.
 
Funds in the USD-hedged global flexible-bond category were the main beneficiaries of the rush to bond funds, specifically the PIMCO GIS Income Fund, rated Silver by Morningstar’s analysts. The fund amassed net inflows of EUR4.1 billion during the month and is now Europe’s largest open-end fund. In total for the month, PIMCO saw inflows of EUR5.8 billion into its Europe-domiciled open-end funds, taking its year-to-date total flows to EUR27.0 billion Euros.
 
June’s strong total net inflows of EUR53.4 billion propelled Europe-domiciled long-term open-end funds to a new semi-annual record tally of EUR285 billion.
 
Open-end equity funds registered net inflows of EUR5.5 billion, with global emerging markets and global large-cap blend funds the main beneficiaries.
 
US equity funds saw heavy outflows in June as European investors reallocated their portfolios away from US companies.
 
Allocation funds continued to see strong inflows across a wide range of categories, raising their total for the first half of the year to EUR72.9 billion.
 
Standard Life and Aberdeen, whose proposed merger was approved by shareholders and UK’s Competition and Market Authority in June, saw further outflows. Standard Life Investment’s total outflows for the past quarter were EUR1.9 billion, resulting in net outflows for 13 months in a row.
 
Matias Möttölä (pictured), CFA, Associate Director, EMEA Manager Research, says: “There were no challengers to PIMCO’s dominance in June. The US-based company’s inflows for the month have taken its year-to-date total flows to EUR27 billion Euros, a figure which corresponds to 29 per cent of the asset manager’s total assets at the end of last year, and which brings PIMCO’s total assets in Europe-domiciled funds beyond their peak levels of 2013.”

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