Equity fund investors are edging back into the market, but the continuing stampede into bond funds dwarfed the second consecutive month of inflows into equity funds. Bond funds carried the day yet again, posting inflows of EUR 22.05 billion in October.
Key findings from Morningstar’s report on October asset flows include:
Ali Masarwah from Morningstar’s European research team comments: “Investors’ motivation for the continuing craze for bond funds is open to interpretation. Superficially, European investors appear risk-happy and even indifferent toward tightening credit spreads, yet cautious when it comes to equities. Desperation, however, might also be an important driver. Institutional investors face the prospect of long-term liability gaps, which arguably cannot be bridged by low-yielding, safe government bonds. Meanwhile, investors are once again sticking to well-established names and large flagship funds offered by the likes of PIMCO and AllianceBernstein.”