Expert Investor - Fund Selector Asset Class Report October 2017 FSACR_Oct17_BOOK.v2 | Page 15

European Fund Flows Data
These graphs show the assets flowing
into and out of European-domiciled
bond, absolute return/hedge and
alternative strategies over the past year
(data provided by Morningstar).
– With the best fixed-income investment
sentiments being reserved for EM debt, it is
no surprise that EM govvies have attracted
huge inflows in 2017 adding up to over
€38bn in the seven months to July.
– In developed bonds, flows for high yield
continue to be volatile. Sentiment became
negative in Q1 ‘17 and we see potential for
further outflows.
– Multi-asset funds (called ‘allocation’
funds by Morningstar) have attracted
phenomenal net inflows since July 2016
amounting to €109bn. Unconstrained
(flexible) bond funds and the broad
absolute return asset class have also
enjoyed the limelight taking in €64bn and
€47bn net respectively.
– Among the hedge strategies, multi-
strat has been the most successful and
consistent. Sentiment towards long/short
equities has strengthened and net flows
have become positive again.
– Property and commodity funds are going
smoothly if quietly. Overall flows in both
categories have been consistently positive
since the start of the year.
Developed market bonds (€bn)
Dev mkt corp bond
Dev mkt govt bond
EM and convertible bonds (€bn)
HY bond
8
EM corp bonds
EM govt bonds
Convertible bonds
8
6 6
4 4
2 2
0 0
-2 -2
-4 -4
-6
-8 -6
-8
Jul ’16
Oct ’16
Jan ’17
Apr ’17
Jul ’17
Absolute return and others (€bn)
Absolute rtn
Multi-asset funds
Jul ’16
Oct ’16
Jan ’17
Apr ’17
Jul ’17
Multi-strategy, l/s equity & l/s debt (€bn)
Unconstrained bds
Multi-strategy
18 8
16 6
14
Long/short eqs
Long/short bds
4
12
10 2
8 0
6
-2
4
-4
2
-6
-8
0
-2
Jul ’16
Oct ’16
Jan ’17
Apr ’17
Jul ’17
Jul ’16
Oct ’16
Jan ’17
Apr ’17
Property and commodities (€bn)
Property
Commodities
8
6
4
2
0
-2
-4
-6
-8
Jul ’16
Oct ’16
Jan ’17
Apr ’17
Jul ’17
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