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Hedge fund-type products lead October rebound

graph_up_downInflows to European long-term funds recovered from a “brief slump” in August and September, to rise in October.

European-domiciled open-end funds saw net inflows of €45.6 billion after €38.8 billion in September, Morningstar reported.

Demand for alternative funds, which implement hedge-fund type strategies, rebounded the strongest.

Equity funds profited “mainly from a return to favour of actively managed funds”, posting net inflows of €12.5 billion, the second-highest level of inflows in a one-month period in four years.

But net subscriptions of bond funds hit a ten-month low and Morningstar attributed this to flagging demand for global emerging markets bond funds, especially those investing in local currencies, as well as for global and high-yield bond funds.

With two months left in the year, the total tally into European open-end funds has risen above €600 billion, translating to a “healthy organic growth rate” of 10%, said Morningstar.

Speaking about flows to hedge fund-like products, Ali Masarwah, regional editorial director at Morningstar, said: “While the comeback of alternative multi-strategy funds was one of the main trends in October’s flows, the monthly inflows of €1.5 billion were still the third-lowest this year.”

Masarwah added that AQR, Aviva Investors, and BlackRock enjoyed the highest inflows on a by-company comparison in this category, but the largest funds suffered either high outflows (Standard Life Global Absolute Return Strategies) or were “well below” this year’s levels of inflows (Invesco Global Targeted Returns and Deutsche Concept Kaldemorgen).

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