Risk-off European investors pile into money market funds

Risk-off, European, investors, money, market, funds, money market funds, investments, MarchMoney market funds emerged as the best-selling investments in March, as European investors poured €34.1 billion into the vehicles contributing to positive flows for the industry.

Data from Refinitiv Lipper showed a strong appetite for money market funds helped boost overall flows for mutual funds and ETFs in Europe with net inflows of €11 billion for the month.

Detlef Glow, head of EMEA research at Refinitiv Lipper, said: “It was not surprising that March 2023 was, in general, a positive month for the European fund industry given the rather positive revisions of the economic outlooks for the major economies globally and a possible end of the interest hiking cycle of central banks in the near future.”

Nevertheless, long-term, actively managed mutual funds recorded outflows of €23.1 billion in March, driven by redemptions from mixed asset and equity strategies.

Considerable outflows from long-term funds and strong inflows to money market funds might suggest European investors remain in “risk-off” mode despite an improving outlook.

Glow said: “Within the current market environment, it is somewhat surprising that European investors sold mixed-assets products since these products were European investors’ darlings in nearly all market environments in the past.”

After money market funds, bond funds were the strongest selling category, with inflows of €1.6 billion. ‘Other’ funds attracted €1.1 billion in inflows, while real estate funds recorded €700 million in sales.

The worst selling categories were led by mixed asset strategies, which saw €13.7 billion in outflows, followed by alternative funds and equity funds with redemptions of €6.7 billion and €6 billion, respectively.

On a company basis, BlackRock was the best-selling fund promoter in March, generating €21.9 billion in sales, followed by Swisscanto with €6.9 billion, and Goldman Sachs with €6.2 billion.

Glow noted that BlackRock, Goldman Sachs and BNP Paribas were all positively impacted by strong demand for money market funds in March.

© 2023 funds europe

Upcoming webinars

Fund oversight and compliance are crucially important features of the modern investment landscape. Our panel discussion will examine current challenges and assess why it's time to integrate, automate and digitise.

Approaching the 2030 Sustainable Development Goals midpoint, Clarity AI analysis reveals a mismatch: a $3.7T gap, urging investors to bridge it and align sectors for global progress.