According to Morningstar, European long-term funds saw net outflows of €15.8 billion in May of this year, which is the worst monthly flow result since March 2020.
Fixed income funds were particularly hard hit this month and experienced net outflows of €16.5 billion. Money market funds suffered a loss of €10.5 billion in May, while commodities suffered a loss of €1.6 billion.
However, equity funds saw a net increase in new subscriptions of €2.9 billion for May, compared to €987 million for allocation funds.
ESG strategies had varying degrees of success, with Article 9 funds that are impact and ESG focused bringing in a net of €8.5 billion. ESG-linked long-term Article 8 funds lost a total of €4.5 billion.
"Soaring inflation, along with growing recession fears and great uncertainty surrounding the war in Ukraine, is turning investors’ sentiment sour," said Valerio Baselli, EMEA investment specialist at Morningstar. "Long-term Europe-domiciled funds shed €15.8 billion in May, the worst monthly result in terms of flows since March 2020. This owed primarily to strong redemptions from fixed-income products."
"At the same time, investors poured €2.9 billion in equity funds last month, a modest result if compared with the average of the last two years but one that allowed the global category group to stay in positive territory. Global large-cap blend, water, and ecology funds were the main beneficiaries, as well as income-equity funds"
The biggest redemptions in May were reported by asset managers Aviva, BlackRock, and Lantern Structured Asset Management.
By fLEXI tEAM