Italy leads the way for European fund flows in 2014

Italy under scrutinyItaly dominated European fund flows last year, with a total of €47 billion in net sales.

Overall there was a total of €367 billion in European net sales in 2014, representing a 95% increase on 2013 and just short of the best ever total of €372 billion in 2006.

Cross-border fund flows were strong, with €179 billion collected over the year, according to a report by financial data company Lipper.

The majority of Italian net sales were for mixed asset funds, which totaled €28.4 billion. Bond funds reached €14.7 billion of sales, while equities accounted for just €3.2 billion.

Germany and Spain were close in terms of flows throughout 2014, with Germany just nudging ahead by €600 million pushing Spain into third. The United Kingdom came sixth with €13 billion of net flows although a slow last quarter pushed the UK down the rankings.

Despite the threat of an increase in interest rates, bond funds had their seventh consecutive year of growth, with a total of €164 billion in net sales last year. Equities could only bring in €60 billion by comparison.

Mixed-asset funds continued to be a success throughout Europe last year, with €125 billion being collected. However, the number of new mixed-asset fund launches was down for the first time since 2010, suggesting the trend may now possibly have hit its peak.

The mixed-asset trend, which includes flows into fund-of-funds portfolios of varying risk, also reflected Europe’s preference for broad-based diversification in an increasingly fraught geopolitical environment.

Commodity funds struggled amid a difficult macro-economic environment and saw €2.2 billion of net outflows last year.

Broad-based European corporate bond funds proved very popular, collecting some €58 billion across various iterations. This was also interspersed with preferences for larger-cap “safe-haven” equities in the US and Europe.

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