Fund investors make ‘surprising’ allocations to bonds in February

bonds Many European-based investors opted for bond funds in February, a move that analysts at Refinitiv described as “surprising”.

“Given the current interest rate environment, it was surprising that bond funds were the best-selling asset type in the segment of long-term mutual funds,” they said in a fund flows report.

Hard-currency emerging market bonds and euro currency bonds had the best sales in the bond category. Bond funds had €7.6 billion of inflows in total – but global equity was the best-selling sector of all long-term funds, with €8.3 billion of net inflows.

Despite these figures, February was the tenth month in a row for net outflows from European long-term funds even though markets rebounded during the month. Equity funds and mixed-asset funds saw outflows, though real estate had inflows of around €200 million.

Overall net outflows from long-term funds were of €8.9 billion.

Money market products, which are not part of the long-term category, also had outflows of €8.8 billion for February.

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