Fund investors flocked to Irish & Lux funds in May


Among European fund investors, US dollar- and euro-denominated corporate bond products were among the top drawing segments during the month of May. Photo credit: South Bend Voice/Ramy Majouji (CC BY 2.0) 

Judging by net inflows, European investment funds, particularly those based in Ireland and the grand duchy, returned to growth mode last month.

Funds experienced a slump as the covid-19 pandemic spooked investors and hit asset prices in March, but the segment had regained much of the ground it lost by the end of April.

Figures from the data firm Refinitiv Lipper released this week showed there was roughly €40.9bn of net inflows into long-term European investment funds in May 2020. This included €5.3bn of net inflows into exchange-traded funds.

Ireland (+€30.8bn), Luxembourg (+€26.3bn) and the UK (+€5.6bn) were the fund domiciles with the highest net inflows overall. France (-€2.2bn), the Netherlands (-€0.6bn) and Italy (-€0.5bn) recorded the highest outflows.

Across Europe, money market funds notched up net inflows of €28.2bn. Money market funds accounted for about half of net inflows into Irish funds and a bit more than 40% for Luxembourg and France.

“Bond funds (+€29.6bn) were the best-selling long-term asset type for May,” Refinitiv Lipper observed. Ireland-domiciled funds led in the bond sector (+€13.4bn), followed by Luxembourg (+€10.1bn) and Switzerland (+€1.6bn). The biggest net outflows were found in Belgium-domiciled funds (-€0.2bn), followed by Denmark and the Netherlands (both -€0.1bn).

The next highest segment was equity funds, which posted net inflows across Europe of +€7.9bn. “For equity funds, products domiciled in Luxembourg (+€4.0bn) led the table, followed by the U.K. (+€2.0bn) [and] Sweden (+€1.7bn),” the data firm’s Detlef Glow wrote.

Mixed-asset funds had net inflows of +€5.7bn across Europe, led by Luxembourg (+€2bn), the UK (+€1.3bn) and Germany (+€0.7bn).

“On the other hand, alternative Ucits funds (-€6.0bn) were again the only asset type with net outflows from long-term mutual funds,” the research outfit said. Alternative Ucits funds domiciled in the Isle of Man collectively had net inflows of +€0.1bn, with Hungary (+€0.03bn) and Denmark (+€0.02bn) in second and third place, respectively. France (-€2.9bn), Luxembourg (-€1.2bn) and Italy (-€0.5bn) experienced the highest outflows in the category.

According to the memorandum: “JP Morgan was the best-selling fund promoter for May overall, with net sales of €16.8bn, ahead of BlackRock (+€13.7bn) and Morgan Stanley (+€4.2bn).”

The Refinitiv Lipper update covered 34 European countries and was issued on 22 June.