European equity funds in record sell-off

Added 18th August 2016

European equity funds experienced their largest ever monthly net outflows in July, beating the previous record set in January 2008, according to Morningstar fund flows data.

European equity funds in record sell-off

Net outflows totalled €17.7bn ($20bn, £15.2bn), including €3.3bn from UK equity funds (also a record high). While most of the outflows came from actively managed funds, index trackers also suffered net redemptions.

Over the past seven months, European equity funds recorded a whopping €58bn in net outflows.

It’s quite remarkable how quickly investor sentiment towards the asset class has changed, as European equity funds saw €63bn in net inflows during the previous seven month-period (see chart below).

All cards on EM

As covered extensively by our sister publication Expert Investor recently, investors have now set their sights on emerging market equities instead.

The asset recorded €5.1bn in net inflows in July, the highest monthly inflows since January 2013. Almost all of these inflows flowed into global emerging market equity funds. Despite all the speak about EM equity ETFs seeing record inflows, actively managed funds took most of the new money.

Emerging markets is really the only place to entice equity investors at this moment. While some fund buyers and asset allocators moved some money to US equities in the wake of the Brexit vote, fund flows were only marginally positive in July. Japanese equities, for their part, recorded an eighth straight month of net outflows.

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About Author

Tjibbe Hoekstra

Senior Reporter

Tjibbe joined Expert Investor as a senior reporter in March 2014. Before moving to London he worked as a financial news reporter for various news outlets in Amsterdam, including Reuters and ANP, the main news agency in the Netherlands. He also worked for Fondsnieuws, a website and magazine for finance professionals in the Netherlands. Tjibbe holds a MSc in Public Administration and a post-graduate diploma in Journalism.

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