May 2022 worst month for outflows since Covid outbreak

European long-term funds experienced €15.8 billion of net outflows in May this year, the worst monthly result in terms of flows since March 2020 according to Morningstar.

During this month fixed income funds were particularly hard hit, and recorded €16.5 billion in net outflows for the month. Meanwhile, money market funds lost €10.5 billion in May, and commodities lost €1.6 billion.

However, equity funds recorded a net of €2.9 billion in new net subscriptions for May, while allocation funds attracted €987 million.

There were also mixed results for ESG strategies, with Article 9 funds that are impact and ESG centred attracting net inflows of €8.5 billion. Long term Article 8 funds, those which are ESG-linked, overall lost €4.5 billion.

Valerio Baselli, EMEA investment specialist at Morningstar, said: “Soaring inflation, along with growing recession fears and great uncertainty surrounding the war in Ukraine, is turning investors’ sentiment sour. Long-term Europe-domiciled funds shed €15.8 billion in May, the worst monthly result in terms of flows since March 2020. This owed primarily to strong redemptions from fixed-income products.

“At the same time, investors poured €2.9 billion in equity funds last month, a modest result if compared with the average of the last two years but one that allowed the global category group to stay in positive territory. Global large-cap blend, water, and ecology funds were the main beneficiaries, as well as income-equity funds.”

From an asset manager perspective, Aviva, BlackRock, and Lantern Structured Asset Management suffered the biggest redemptions in May.

© 2022 funds europe

HAVE YOU READ?

THOUGHT LEADERSHIP

The tension between urgency and inaction will continue to influence sustainability discussions in 2024, as reflected in the trends report from S&P Global.
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

CLOUD DATA PLATFORMS

Luxembourg is one of the world’s premiere centres for cross-border distribution of investment funds. Read our special regional coverage, coinciding with the annual ALFI European Asset Management Conference.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST