European investors began 2024 by allocating to equity and bond funds, according to data on asset flows from Morningstar.
The data provider’s figures for January 2024 showed that fixed-income strategies saw €31.8 billion of new inflows, the best monthly result for the asset class since July 2021.
Equity funds also saw a return to positive inflows after the outflows experienced in December. However, the flows were heavily weighted to passive equity funds which saw €19.4 billion in inflows during the month.
BlackRock reports record fixed income inflows in 2023 global ETP market
Hedge funds adapt to geopolitical strain, embrace fixed income in 2024
Another big beneficiary in January was the Europe-domiciled long-term funds sector which experienced €24.9 billion of net inflows in the month. Money market funds saw similar levels of net inflows (€28 billion).
Not all funds enjoyed a positive January though. The outflows continued for allocation and alternative funds which suffered €7.6 billion and €2.1 billion in net outflows respectively.
Morningstar analyst Valerio Baselli, of the EMEA editorial research team, described the January figures as a “good start for the European asset management sector” after a “tumultuous 2023” and cited the expectation of early interest rate cuts ads the driving force behind the change in investor sentiment.