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Bond funds take European asset management to new high

Bond funds are likely to have propelled Europe’s asset management industry to record-setting fund flows in 2017.

According to Morningstar asset flows data, November saw €23.6 billion of inflows into fixed income funds, boosting total flows for the year to €270 billion.

Net flows for the year rose to €664 billion across the industry by the end of that month, beating the previous record in 2014.

The news supports the European Fund and Asset Management Association’s estimation that European fund flows were set for a record year in 2017.

The Morningstar Silver Rated Pimco GIS led fixed income flows with almost €4 billion of new flows generated in every month of 2017.

Weaker performance was seen by high-yield bond categories in November as widening spreads unnerved investors.

Equity funds also posted healthy net inflows of €98 billion in the first eleven months of the year, making 2017 the best year for open-ended equity funds since 2013.

Ali Masarwah, regional editorial research director at Morningstar, said: “It is safe to assume that 2017 will be remembered as the year of the bond fund, in spite of low yields and warnings of extremely high valuations.

“Structural demand for fixed income products has driven inflows across Europe this year, with the largest bond houses and flagship funds benefiting the most from the flow of assets.”

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