European-domiciled funds suffered outflows of almost €50 billion last month in the worst month since March 2020.

The outflows have brought down the assets in long-term funds domiciled in Europe to €10.7 trillion at the end of June, according to Morningstar data.

This is down from May’s figure of €11.3 trillion.

In June, fixed income saw the greatest outflows of €28.4 billion, with the majority coming from funds exposed to euro ultra-short-term bonds, high-yield bonds and global emerging market bonds issued in US dollars.  

Equity funds saw outflows of €12.1 billion, yet passive equity funds have been experiencing positively monthly flows for over two years.

European asset classes all had a negative month, with outflows of €2.6 billion from commodities and €2.1 billion from alternative strategies. Allocation funds also saw substantial withdrawals from investors with €1.7 billion in outflows.

European-domiciled long-term funds classified as Article 8 saw outflows of €17 billion for the month. However, those classed as Article 9 saw inflows of €686m and, as a result, were the only group able to achieve a positive organic growth rate for the second quarter of this year.

Regarding companies, Aviva saw the biggest asset growth and its fund Aviva Investors Sterling Government Liquidity was the top-selling fund of the month. Following Aviva were CaixaBank and Lyxor.

Meanwhile, Pimco along with Eurizon and BlackRock had the worst month.

“Soaring inflation, supply chain strain, growing recession fears, and great uncertainty surrounding the war in Ukraine are turning investors’ sentiment sour,” said Morningstar’s European Asset Flow data report for June.

“Long-term Europe-domiciled funds shed €47.7 billion in June, the worst monthly result in terms of lows since March 2020. While the half-year picture is more mixed, no major asset class was spared from outflows last month.”

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