Assets in long-term European-domiciled funds declined in February as multiple concerns weighed on investor sentiment, data from Morningstar show.
By the end of the month, total assets in European open-ended funds and ETFs had fallen to €11.6trn - around €300bn less than the end of January, as an exodus from fixed income left its mark.
Net inflows stood at €4bn, with equity funds making up the losses seen in bonds, attracting net €11.3bn. European fixed income funds suffered redemptions of €18bn.
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Valerio Baselli, senior editor at Morningstar, said: "Growing concerns on a monetary-policy tightening, inflationary pressure and the outbreak of war between Russia and Ukraine has turned investors' sentiment particularly low.
"Investors sent just under €4bn to long-term European-domiciled funds in February, the worst monthly result in terms of flows since March 2020. This is owed primarily to strong redemptions from fixed-income products."
Looking through an ESG lens, funds classified as Article 8 under SFDR lost €4.4bn, while Article 9 funds - the greenest of the lot by the EU regulation - attracted over €3bn in January, according to Morningstar's research into the market.
According to recent analysis by the data provider on behalf of Investment Week, inflows into global funds with between 5% and 70% of their holdings invested in controversial weapons soared to over $792m in January, nearly six times the net $13.1m seen throughout 2021.
