US outflows
The one fixed income asset class that is now out of fashion with European investors is actually one that saw more inflows than any other asset class between 2011 and 2014. High-yield bond net flows fell by €3bn between July 2014 and June 2017, down from net inflows of €96.7bn over the preceding three years.
While European high-yield bonds continued to see modest inflows, a net €14bn was pulled out from US high-yield bond funds.
US high-yield tends to correlate rather strongly with an asset class that also saw inflows turning into outflows over the past three years: US equities witnessed net outflows of €17.6bn.
EM equities, in a sharp contrast to the buoyant flows into EM debt, also suffered net outflows, though these all came from regional equity funds (Asia, Russia, Latin America, BRIC funds etc.).
In a sign that many investors prefer to evade asset allocation responsibilities, global emerging market equity funds, as well as global equity funds, saw positive flows.
The only two regions that had net inflows over the past three years were Japanese and European equities, though the respective figures were significantly lower for both than during the previous three-year period (see chart above).
Even though equity markets have roared ahead over the past three years, and especially during the second half of that period, net inflows have come down for all equity asset classes compared to the previous three years.
This suggests investors are not (yet) overly buoyant.
