A global bond boom is on, latest Morningstar European asset flows data reveals

The latest Morningstar European asset flow data shows that long-term funds enjoyed a strong first quarter, receiving more than Euro 50 billion of new investor assets. Of this, more than 70 per cent went to fixed-income funds, while equity funds, by contrast, had net redemptions for March and only slightly positive inflows for the quarter.

Editorial Team
May 1, 2012
2 minutes

Key findings from a Morningstar research report released today include:

First-quarter 2012 asset flows:

• Long-term funds absorbed more than Euro 50 billion of investor assets during the first quarter; fixed-income funds took by far the largest share with inflows of more than Euro 37 billion during the period.

• BNP Paribas took in the greatest inflows for the quarter—some Euro 7.6 billion— marking its strongest quarter since 2009.

• Bond-heavy houses BlackRock and PIMCO attracted more than Euro 3 billion and Euro 5.5 billion, respectively.

• Of the quarterly inflows into fixed-income offerings, those focused on corporate debt, corporate high yield, and emerging markets dominated.

• Long-term equity funds saw a mildly positive quarter, attracting just over Euro 2 billion in inflows; equity-focused fund groups Fidelity and DWS saw quarterly outflows.

• For equity investors, emerging-markets and income-oriented funds proved most popular; Aberdeen Global Emerging Markets had inflows of Euro 1.5 billion for the quarter, and M&G Global Dividend and Templeton Asian Growth saw inflows of nearly Euro 1 billion each.

• Global Emerging Markets Allocation was the fastest-growing category of any meaningful size, seeing quarterly organic growth in inflows of 34%.

March asset flows:

• Long-term funds absorbed more than Euro 16 billion of investor assets in March; fixed-income funds took by far the largest share, with inflows of nearly Euro 14 billion during the month.

• Equity funds saw the greatest March outflows of any asset class, with net redemptions of Euro 1.3 billion.

• Money market funds saw March inflows of more than Euro 10 billion, enough to move the asset class back into the black.

• French fund house Amundi attracted Euro 5.2 billion, its greatest monthly inflows in recent years.

Dan Lefkovitz from Morningstar’s European research team comments:

“A global bond boom is on. But recent European flows to bond funds should not be interpreted as a vote of confidence in the Eurozone. Investors are clearly differentiating between troubled governments and profitable corporations, and between the indebted West and cash-flush emerging markets.”