ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

Europe-domiciled funds see outflows of €47.7bn in June

Global large cap and ecology funds among this year’s winners, while UK and continental Europe equity funds have seen outflows


Pete Carvill

Data from Morningstar suggests that European funds had their worst month in June since before the coronavirus pandemic, seeing nearly €50bn worth of outflows.

Figures for the end of June suggest that long-term funds domiciled within Europe fell to €10.7trn, down from €11.3trn in the previous month. Net outflows over the period reached €28.4bn, with the worst results reported among fixed income funds. Bond funds reportedly bled €84bn, making H1 2022 the worst on record for the asset class.

Elsewhere, a video published this week by the research firm set out what it saw as the key trends in 2022.

There, Bhavik Parekh, a manager research analyst at Morningstar, said: “As many of you will not need reminding, the markets have been very volatile this year. But in the flows, some of the trends from last year have remained. For example, global large cap and the ecology funds have continued to see inflows this year at quite a rate, and UK and Continental Europe equity funds have seen outflows.”

He added: “Within the UK, and concerns with Europe equity funds, it’s the growth funds that have seen outflows, and the biggest fund in the UK market, which is Fundsmith Equity, that has quite a growth bias as well, and that has had very big outflows, over a billion so far this year.”

Parekh said that the last year to year-and-a-half has seen active funds pull in more money than passive funds. He said the reason for this is that sustainable and multi-asset funds are quite popular, while being nearly entirely active vehicles.

He added: “But what we’ve seen this year, especially over the last couple of months, is that active funds have really suffered. They did have inflows towards the beginning of the year, but the last couple of months we’ve had lots of outflows, and active funds have really bore the brunt of those undoing the inflows that we’ve seen previously.”