With policy makers and central banks striving to ease the pain for troubled eurozone economies, European fund investors may be shrugging off the risk of Euro implosion, according to Morningstar’s latest European fund flows data. Morningstar fund flows data for September suggests that investors are increasing their exposure to risky assets, and not just within fixed income. In September, equity funds received net inflows of EUR 1.91 billion, their first positive month since February. This ends a long period of disconnect between fund investor behaviour and equity market performance.
Key findings from Morningstar’s report on September asset flows include:
Ali Masarwah from Morningstar’s European research team comments: “European fund investors have seemingly begun to embrace the idea that the Euro may not implode after all. The comeback of equity funds in September suggests that investors are finally reacting to buoyant equity markets and the announced Outright Monetary Transaction programme of the European Central Bank. That said, the continuing bond fund glut in September and the sizable flows into high-yield bond funds over the past months indicate that markets are still distorted by the monetary policy of the ECB and the persistent eurozone crisis.”