Euro fund flows: Risk off mode continues
Detlef Glow, head of EMEA Research at Thomson Reuters Lipper analyses the latest fund flows throughout March.
After two months of rough market conditions the European fund industry enjoyed net inflows of €13.6 bn into long-term mutual funds during March. With regard to the overall flow pattern, it seemed that European investors, in a risk-off mode, were set to further sell risky assets; equity funds (-€8.1 bn) were the asset type with the highest net outflows in Europe for March, bettered by “other” funds (-€0.3 bn). In contrast, bond funds (+€14.5 bn) were the best selling asset type for March, followed by alternative UCITS (+€5.8 bn), commodity products (+€0.7 bn), and real estate products (+€0.5 bn) as well as mixed-asset funds (+€0.4 bn).
Money Market Products
After net inflows during January and February, money market products faced heavy net outflows (-€30.0 bn) for March.
This flow pattern drove the overall fund flows to mutual funds in Europe to a negative €16.5 bn for March. The European fund industry faced net outflows of €16.0 bn over the course of first quarter 2016.
Money Market Products by Sector
Within the money market fund segment Money Market GBP (+€3.7 bn) was the best selling sector for March, followed by Money Market EUR Leveraged (+€0.8 bn) and Money Market SEK (+€0.6 bn). At the other end of the spectrum Money Market EUR (-€25.1 bn) and Money Market USD (-€9.3 bn) suffered the highest net outflows. Comparing this flow pattern with the flow pattern for February shows that European investors continued to sell off U.S. dollar-based money markets products and further bought back into British pound- and Swedish krona-based money market products in March.
Graph 1: Estimated Net Sales by Asset Type, March 2016 (Euro Billions)
Source: Thomson Reuters Lipper
Fund Flows by Sectors
Within the segment of long-term mutual funds Bond EUR Corporates (+€4.5 bn) was the best selling sector, followed by Bond Emerging Markets Global in Local Currency (+€2.6 bn), Bond Europe High Yield (+€2.1 bn), and Equity Emerging Markets Global (+€2.0 bn) as well as Bond Emerging Markets Global in Hard Currency (+€1.9 bn).
Graph 2: Ten Top Sectors, March 2016 (Euro Billions)
Source: Thomson Reuters Lipper
At the other end of the spectrum Equity Eurozone (-€2.6 bn) suffered the highest net outflows from long-term mutual funds, bettered somewhat by Equity Europe (-€2.3 bn) and Equity Japan (-€1.5 bn) as well as Bond EMU Government (-€1.4 bn) and Absolute Return EUR Low Yield (-€1.3 bn).
Graph 3: Ten Bottom Sectors, March 2016 (Euro Billions)
Source: Thomson Reuters Lipper
Fund Flows by Markets
Single fund market flows (including those to money market products) showed a negative picture for March, with only 10 of the 34 markets covered in this report showing net inflows. Ireland (+€7.5 bn), Switzerland (+€1.4 bn), Germany (+€0.3 bn), Norway (+€0.3 bn), and Italy (+€0.2 bn) were the domiciles with the highest overall net inflows, while France—driven by the outflows from money market products—was the single market with the highest net outflows (-€21.5 bn), bettered by Belgium (-€0.9 bn) and the Netherlands (-€0.8 bn).
Graph 4: Estimated Net Sales by Fund Domiciles, March 2016 (Euro Billions)
Source: Thomson Reuters Lipper
Within the equity sector funds domiciled in Belgium (+€1.1 bn) led the table for March, followed by those domiciled in Switzerland (+€0.5 bn), Ireland (+€0.2 bn), Jersey (+€0.1 bn), and Austria (+€0.02 bn). Equity funds domiciled in Luxembourg (-€3.5 bn), the United Kingdom (-€2.6 bn), and France (-€1.7 bn) stood at the other end of the table.
For bond funds, products domiciled in Ireland (+€7.2 bn) led the table for March, followed by funds domiciled in Luxembourg (+€6.9 bn), the United Kingdom (+€1.1 bn), and Switzerland (+€0.3 bn) as well as Norway (+€0.2 bn). Meanwhile, the Netherlands (-€0.8 bn) was the domicile with the highest net outflows from bond funds, bettered by funds domiciled in Austria (-€0.4 bn) and Sweden (-€0.2 bn).
With regard to mixed-asset products Germany (+€0.6 bn) was the domicile with the highest net inflows, followed by funds domiciled in Ireland (+€0.5 bn), Switzerland (+€0.2 bn), Spain (+€0.1 bn), and Italy (+€0.1 bn). On the other side of the table funds domiciled in the United Kingdom showed the highest net outflows (-€0.6 bn), bettered somewhat by funds domiciled in France (-€0.2 bn) and Luxembourg (-€0.1 bn).
Fund Flows by Promoters
Nordea, with net sales of €2.3 bn, was the best selling fund group for March overall, ahead of Generali (+€2.1 bn) and Ignis (+€1.9 bn).
Table 1: Ten Best Selling Promoters, March 2016 (Euro Billions)
Source: Thomson Reuters Lipper
Considering the single-asset bases, BlackRock (+€5.7 bn) was the best selling promoter of bond funds for March, followed by Pimco (+€1.4 bn), Capital Group (+€1.2 bn), and Eurizon Capital (+€0.9 bn) as well as Carmignac Gestion (+€0.8 bn). Within the equity space KBC (+€1.0 bn) stood at the head of the table, followed by Morgan Stanley (+€0.8 bn), Old Mutual (+€0.5 bn), and Deka (+€0.5 bn) as well as Fundsmith LLP (+€0.4 bn). The German company Union Asset Management (+€0.3 bn) was once again the leading promoter of mixed-asset funds in Europe, followed by BNY Mellon (+€0.3 bn), Allianz (+€0.2 bn), and JP Morgan (+€0.2 bn) as well as Pimco (+€0.2 bn).
Best Selling Funds
The ten best selling long-term funds gathered at the share-class level total net inflows of €9.3 bn for March. The split of the ten best selling funds by asset type was somewhat in line with the overall sales numbers, since bond funds (+€4.5 bn) were—with six funds—the dominating asset type among the top-ten funds list, followed by equity funds (+€3.5 bn) and mixed-asset funds (+€1.3 bn)—with two funds each.
Table 2: Ten Best Selling Funds, March 2016 (Euro Millions)
Source: Thomson Reuters
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