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European Long-Term Funds Continue to Attract Investors, Emerging Markets Funds Show Resurgence in May, Latest Morningstar Fund Flows Data Reveals

Morningstar’s latest fund flow figures reveal that long-term European funds continue to see substantial demand from investors. Open-end funds posted net inflows of EUR 30.4 billion in May, and fixed-income funds welcomed EUR 14.13 billion, the highest inflows of any asset class. The resurgence of global emerging markets is demonstrated in the latest monthly figures, as investors sent EUR 2.87 billion into global emerging-markets bond funds last month. May also witnessed the third consecutive month of positive inflows for global emerging-markets equities.

Further findings for May Morningstar fund flows data include:

  • Alternative funds received EUR 4.19 billion in net new assets.
  • Asset flows into equity funds declined compared to the previous month but were still comfortably in positive terrain, taking in net EUR 1.64 billion.
  • Global bond funds and USD diversified bond funds continued to reel under outflows from the large flagship Franklin Templeton and PIMCO funds, an ongoing trend of the past 13 months.
  • Emerging markets and Asia specialist Aberdeen experienced outflows of EUR 304 million in May, the 14th consecutive month of negative flows for the firm.
  • Of the fund providers receiving the largest inflows in May, BlackRock gained the most assets for the month at EUR 2 billion, with Pioneer Investments, JPMorgan, UBS, M&G, UBS, Allianz Global Investors, Nordea, Goldman Sachs, and DNCA Finance all experiencing positive flows. 
  • German large-cap equity funds saw outflows of EUR 475 million, the second highest in any one period since June 2009.

Morningstar’s Ali Masarwah, of Morningstar’s Asset Flows team, comments: “On the back of buoyant equity markets and increasing complacency of credit investors, open-end funds continued to attract investors in May. The resurgence of emerging-markets funds was also confirmed this month as investors sent nearly EUR 3 billion into global emerging-markets bond funds and, for the third month in a row, global emerging-markets equity funds enjoyed positive inflows. EUR cautious allocation funds and multi-strategy funds, which implement alternative investment techniques, were also much sought after this month. Investor demand for go-anywhere, flexible bond funds and long/short bond funds suggests they are readying themselves for rising yields in the United States and possibly in the UK.”