This article was originally published by our sister title, Portfolio Adviser
Fixed income funds attracted €42.6bn in net inflows during July this year, according to Morningstar’s latest European Asset Flows report, marking the highest uptick in capital allocation since June 2019.
This accounts for 88% of total net flows experienced throughout the month, with €48.4bn being allocated to long-term Europe-domiciled funds in July in total.
This means European funds experienced the highest monthly net flows since January last year. Year to date, investors have poured €188.7bn into European-domiciled funds, meaning that July alone accounted for more than a quarter of 2024’s flows.
Elsewhere, equity funds saw €10.1bn of inflows during July, which was “entirely attributable” to passive funds, according to the report. While passive strategies netted €12.5bn in flows, actively-managed funds suffered net outflows of €2.4bn.
‘Allocation’ funds lost €2.9bn during July, marking its 14th consecutive month of outflows. Article 9 funds also lost €797m, making last month the tenth month in a row it has suffered losses.
On the other hand, Article 8 funds saw their biggest monthly net inflows in more than a year at €20.5m, while alternative funds netted €236m in inflows.
See also: Fixed income attracts €25.7bn net inflows; equities bleed €1.8bn – Morningstar
In terms of Morningstar categories, the global large-cap blend equity sector fared best during the month with net inflows of €13.9bn, while Japan large-cap blend equity strategies lost the most money at €3.3bn.
Overall, assets in long-term Europe-domiciled funds came in at €11.98trn by the end of July, compared to €11.9trn at the end of June.
Antje Schiffler, editor at Morningstar, said: “In July, investors funnelled €48.4bn into long-term Europe-domiciled funds, marking the best monthly inflow since January 2023. This surge reflects a strong appetite for fixed-income strategies amid varied global equity market performances.
“Notably, active fixed income strategies attracted €32.7bn, driven by a robust interest in Asian local currency bonds. Meanwhile, investors withdrew €3.3bn from Japanese large-cap equities, making it the category with the largest outflows in July, while global large-cap blend equity once more was the category that saw the largest net inflows.”
