Valerio Baselli: Morningstar’s monthly analysis of inflows into Europe-domiciled open-end funds and ETFs shows that investors increased their exposure to equity and riskier bond funds in June. Long-term funds continued to attract net new money for the third month running, pulling in 63 billion EUR, the highest level of inflows seen in a one-month period since February.
Fixed-income funds continued to attract the highest inflows, gathering 37 billion EUR last month, meanwhile Equity funds took in 19 billion. Allocation products showed an impressive return to strength in June, pulling in 10 billion, the highest level of monthly inflows since February 2018. As fears of a global recession receded, inflows to commodity funds slowed down considerably in June. Thanks mainly to huge inflows sent to gold ETCs, commodity products posted record-breaking inflows of 14 billion in the first half of the year.
Money market funds continued to see high demand, posting inflows of 45 billion EUR in June, an indicator that some investors are probably waiting for less uncertain times.
Overall, the extensive monetary and fiscal support measures by central banks and governments worldwide have heartened investors who still appear confident that the economy will rise from the doldrums in a V-shaped recovery. This is reflected by the inflows of 164 billion EUR that investors sent to the European fund market in the second quarter; those inflows more than compensated the outflows seen in the first quarter.
A look at the top-selling categories reveals strong demand for corporate bond funds, raking in 5.6 billion EUR of net inflows in June, followed by global large-cap growth funds and equity technology products.
On the other hand, alternative multistrategy funds continued to bleed, shedding 3 billion EUR. For the year to date, these hedge-fund-mimicking strategies have suffered outflows of 13 billion. Alternative long-short credit funds were also very much unloved last month. Finally, energy funds, mostly ETPs, suffered a collective withdrawal to take profit, after the massive inflows seen in April and May, when investors were betting on the price of oil increasing.
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